Key points
- SK Hynix (SKHY) broke ground Thursday on its first US plant, a $4 billion HBM packaging site in West Lafayette, Indiana.
- The company now targets an October 2028 cleanroom opening and mass production in the second half of 2029.
- Its CHIPS Act award, announced in December 2024, had production starting in the second half of 2028.
SK Hynix (SKHY) broke ground Thursday on its first manufacturing site in the United States, an advanced packaging plant for AI memory in West Lafayette, Indiana. The company said the cleanroom will open in October 2028 and that mass production of next-generation high bandwidth memory will begin in the second half of 2029.
That is later than the schedule the project carried when it was funded. The final CHIPS Act award, announced on December 19, 2024, put mass production in the second half of 2028. The NIST project page still lists that date. Korean outlets including Herald Business were reporting the 2028 target as recently as August 13.
"Today marks the day when the United States and SK Hynix embark on a new future of AI together," Chief Executive Officer Kwak Noh-Jung said in the company's account of the ceremony.
What the Indiana plant will make
The site packages and tests memory. It doesn't make wafers. Wafers produced in South Korea will be shipped to Indiana, packaged and tested there, then delivered to US customers. Advanced packaging is the step that stacks DRAM chips into a single high bandwidth memory part and wires them together. The site will also house an advanced packaging research testbed that customers, universities, and partners can use to build prototypes.
SK Hynix now puts the total investment above $4 billion. It was $3.87 billion when the company signed its agreement with the state of Indiana in April 2024. Separately from the company's own money, the project carries up to $458 million in direct funding and up to $500 million in loans under the CHIPS and Science Act.
About 1,000 people will work at the plant once it is running. SK Hynix put the wider figure at about 7,000 direct and indirect jobs across construction and operations, and said more than 100 companies are under consideration to supply materials, components, and equipment.
Indiana Governor Mike Braun and Senator Todd Young attended, along with Purdue President Mitch Daniels and South Korea's ambassador to the United States, Kang Kyung-wha. SK Group sent Vice Chairmen Yu Jeong-Joon and Lee Hyung-hee. "This project will create good-paying jobs, strengthen our national and economic security, and ensure the technologies of the future are developed and manufactured here in the United States," Young said. SK Hynix held the ceremony at Purdue University and signed a research agreement with the school.
Korean media had reported before the event that SK Group Chairman Chey Tae-won and Nvidia (NVDA) CEO Jensen Huang might appear together in West Lafayette, as Korea JoongAng Daily wrote on August 12. Neither name appears in SK Hynix's account of the day. SK Hynix is the main supplier of high bandwidth memory to Nvidia, and its HBM4 parts may cost Nvidia nearly twice what HBM3E did.
SKHY was trading 2% higher at $161.13 at 12:13 p.m. Eastern Thursday, against a close of $158.02 on Wednesday.
Elon Musk said this month that memory supply grows about 20% a year while demand grows 200%. Kwak told Bloomberg on July 10, in his first English-language interview, that SK Hynix expects customer demand to run ahead of its own supply capacity "even beyond 2030," and that 2027 will bring the worst memory shortage the industry has seen.
When we listed the plants that would close that gap on August 5, the Indiana site was dated late 2028. The Micron (MU) fabs on the same list ran from mid-2027 to the second half of 2028.
SK Hynix's board approved 54 trillion won, about $38 billion, on August 7 for two fabs at home, Cheongju M17 and Yongin Y2. M17 breaks ground in February 2027 and opens its first cleanroom in December 2028. Y2 follows in July 2027 with a cleanroom in June 2029. The company also committed 40 trillion won, about $28.6 billion, to a buyback on August 19 and said it would cancel every share it repurchases.
