SK Hynix landed $450 million in direct funding and $500 million in loans from the CHIPS and Science Act to build a memory packaging plant for AI products as well as a R&D facility in the US state of Indiana.

SK Hynix also stands to benefit from a 25 per cent tax credit for constructing the new site.

The US Department of Commerce stated the new AI chip site will fill a critical gap in the country’s semiconductor supply chain while also creating 1,000 new jobs.

The latest funding is on top of SK Hynix’s investment of $3.8 billion in Indiana that it announced in April.

The new facility will be home to an advanced semiconductor packaging line that will mass-produce high-bandwidth memory (HBM) memory chips that are key components of GPUs that train AI systems.

Mobile World Live previously reported the mass production of the next-generation HBM products is expected to start in the second half of 2028.

SK Hynix will collaborate with Indiana-based Purdue University on plans for future R&D projects, which include working on advanced packaging and integration with the university’s nanotechnology centre.

US Commerce Secretary Gina Raimondo stated the new plant will “further solidify America’s AI hardware supply chain in a way no other country on earth can match”.