SK hynix breaks ground on a $4 billion advanced packaging facility in Indiana dedicated to AI memory production, targeting volume output by 2029.
SK Hynix Inc. held a groundbreaking ceremony Thursday in West Lafayette, Indiana, for its first advanced high-bandwidth memory (HBM) packaging facility in the United States. The project, valued at more than $4 billion, occupies a 133.5-acre site at Purdue Research Park and positions the South Korean chipmaker closer to American AI customers while further entrenching critical semiconductor supply chains on U.S. soil. Cleanroom operations are scheduled to begin by October 2028, with mass production of next-generation HBM products targeted for the second half of 2029.
Once fully operational, the facility will employ approximately 1,000 people. Across construction, operations, and related supply-chain investment, the project is projected to generate roughly 7,000 direct and indirect jobs locally. Wafers manufactured in South Korea will be shipped to Indiana for advanced packaging and testing before delivery to U.S. customers. To support this ecosystem, SK Hynix is currently evaluating more than 100 potential suppliers of materials, components, and semiconductor equipment for the site—a process expected to attract further local investment and foster a more complete regional semiconductor cluster.
Chief Executive Officer Kwak Noh-Jung addressed the ceremony, stating, "We will expand our investments and collaboration in the US, grow together, and become the most trusted partner in shaping the future of AI in America." Alongside the production line, the site will house an AI semiconductor research and development facility. SK Hynix also signed a research agreement with nearby Purdue University covering HBM, system integration, and advanced packaging technologies. The company plans to build an advanced packaging R&D test platform adjacent to the manufacturing line, linking large-scale production with next-generation semiconductor research.
The Indiana project is supported by the U.S. CHIPS and Science Act, legislation signed into law in 2022 to reduce American dependence on overseas semiconductor production. Under the program, SK Hynix qualifies for up to $458 million in direct grants and up to $500 million in loans, bringing potential government funding to $958 million. This award reflects the narrower scope of a packaging and R&D facility rather than a full wafer fabrication plant. For comparison, the U.S. Department of Commerce separately awarded up to $6.6 billion to Taiwan Semiconductor Manufacturing Co. (TSMC) for its Arizona fabs, up to $6.165 billion to Micron Technology for its New York and Idaho memory plants, and up to $4.745 billion to Samsung Electronics for its Texas logic fab—a figure reduced from an initially proposed $6.4 billion following a due-diligence review.
The company initially announced a $3.87 billion investment agreement in 2024 with Indiana officials, Purdue University, and U.S. government representatives; the total has since surpassed $4 billion. HBM has become an indispensable component for advanced AI acceleration systems from Nvidia Corp. (NVDA) and other chip designers. By vertically stacking DRAM chips to deliver faster data transfer while consuming less power, HBM is uniquely suited to the massive computing demands of large AI models. Unlike conventional memory, HBM chips are tightly integrated with AI processors, creating higher technological barriers to entry and granting suppliers greater pricing power. The product has emerged as a major growth driver for memory makers following the industry’s recent downturn.
According to Counterpoint Research, SK Hynix accounted for 58% of global HBM revenue in the first quarter of 2026, significantly ahead of Samsung Electronics Co. and Micron Technology Inc., which each held a 21% share. Demand for HBM and other advanced memory has surged as technology companies race to build AI data centers, tightening supplies and making memory availability an increasingly critical constraint on AI infrastructure expansion. Nvidia, a major customer for SK Hynix, on Wednesday forecast a 70% jump in revenue in the next fiscal year. That outlook—Nvidia’s first-ever year-ahead sales projection—far exceeded the roughly 44% average growth projected by Wall Street analysts, according to LSEG data, underscoring unabated demand for AI computing despite ongoing memory shortages.
The Indiana investment carries strategic weight beyond raw manufacturing capacity. As traditional process-node scaling grows increasingly difficult, advanced packaging—integrating multiple chips into a single package or stacking them vertically—has become a critical pathway for improving AI chip performance. The United States has historically lagged in this segment of the supply chain, and SK Hynix’s decision to establish domestic packaging and testing capabilities shifts a portion of the AI chip supply chain onto American soil.
Separately, SK Hynix ranks as South Korea’s second most valuable company, behind Samsung Electronics. Earlier this month, its board approved approximately 54.3 trillion won ($38.30 billion) in investments through 2031, including 35.2 trillion won allocated for the second phase of construction of its chip fabrication plants in South Korea. Additionally, parent company SK Group announced it will offer employment and career development opportunities to U.S. veterans who previously served with U.S. Forces Korea.