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SK Hynix holds groundbreaking ceremony for $4 billion Indiana AI chip packaging facility

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WEST LAFAYETTE, Indiana, Aug 27 : South Korean chipmaker SK Hynix on Thursday held a groundbreaking ceremony for an advanced packaging and research facility in Indiana worth more than $4 billion, expanding its U.S. footprint to meet growing demand for memory chips used in AI applications.

The facility, at the Purdue Research Park in West Lafayette, is scheduled to begin cleanroom operations in the second half of 2028, according to SK Hynix’s website and press statements.

A cleanroom is a highly controlled manufacturing space that keeps dust and other microscopic contaminants out during the chipmaking process.

The site will house a next-generation high-bandwidth memory (HBM) packaging line as well as an AI semiconductor research and development facility.

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The investment is part of SK Hynix’s strategy to expand its AI memory operations and locate some closer to major U.S. customers, such as Nvidia, Microsoft and Google, while also strengthening research ties with Purdue University and developing local engineering talent.

The project will add advanced packaging capacity in the United States at a time when AI investment is driving rapid growth in demand for HBM.

HBM is a specialised memory chip that stacks chips vertically to deliver faster data processing while consuming less power, making it well suited to the enormous computing demands of AI applications.

Unlike conventional memory products, HBM chips are tightly integrated with AI processors, creating higher technological barriers to entry and giving suppliers greater pricing power. The product has emerged as a major growth driver for memory chipmakers after the industry’s recent downturn.

RACE TO BUILD DATA CENTRES

SK Hynix accounted for 58 per cent of the global HBM market by revenue in the first quarter of 2026, according to Counterpoint Research, well ahead of Samsung Electronics and Micron Technology, which each held a 21 per cent share.

Demand for HBM and other advanced memory has surged as major technology companies race to build AI data centres, tightening supplies and making memory availability an increasingly important constraint on the expansion of AI infrastructure.

Nvidia, a major customer for SK Hynix, on Wednesday forecast a 70 per cent jump in revenue in the next fiscal year, underscoring unabated demand for AI computing and reassuring investors about the durability of the AI spending boom, even as memory shortages continue to constrain expansion.

SK Hynix initially announced a $3.87 billion investment agreement in 2024 with Indiana officials, Purdue University and U.S. government representatives. The project’s total investment has since risen to more than $4 billion.

The company expects the facility and related supply-chain investment to create about 7,000 direct and indirect jobs locally and contribute to semiconductor supply-chain resilience.

The project has also received U.S. backing. The U.S. government finalised $458 million in grants and up to $500 million in loans under the CHIPS Act in December 2024.

Separately, SK Hynix’s board approved earlier this month about 54.3 trillion won ($38.30 billion) of investments through 2031, including 35.2 trillion won for the second phase of construction of its chip fabrication plants in South Korea.

Source: Reuters

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