Image credit: The Byleline

The U.S. Commerce Department announced Thursday the finalization of a $458 million grant to SK Hynix to support the construction of an advanced chip packaging and research facility in Indiana.

The project, aimed at producing next-generation high bandwidth memory chips used in artificial intelligence systems, represents a significant step toward bolstering the U.S. semiconductor supply chain.

The South Korean company, a key supplier to Nvidia, committed $3.87 billion in April to build the facility in West Lafayette.

The site will include an assembly line to mass-produce advanced chips critical for training AI models. The Commerce Department will also provide up to $500 million in government loans for the project, with grant funds released as SK Hynix achieves project milestones.

The facility is expected to create 1,000 jobs and fill a critical gap in the U.S. semiconductor ecosystem. Kwak Noh-Jung, CEO of SK Hynix, expressed the company’s commitment to developing a resilient AI semiconductor supply chain in the United States.

This funding is part of a broader $39 billion U.S. subsidy program approved by Congress in 2022 to boost domestic semiconductor manufacturing. The initiative also includes $75 billion in lending authority to strengthen the industry.

The Commerce Department has awarded grants to major global semiconductor manufacturers, including TSMC, Intel, Samsung Electronics, Micron, and SK Hynix.

While grants for most manufacturers have been finalized, a $6.4 billion award to Samsung remains pending. Earlier this month, the department finalized a $75 million grant to Absolics for a facility in Georgia to produce advanced semiconductor materials.

Absolics is an affiliate of SKC, which, like SK Hynix, is part of South Korea’s SK Group, the country’s second-largest conglomerate.

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