THE Biden administration has cemented a deal to give SK Hynix as much as US$458 million in grants and US$500 million in loans to support an advanced chip packaging facility in Indiana, a key part of US efforts to build a domestic semiconductor supply chain.
The final contract, which is slightly more than a preliminary deal announced in August, means that the South Korean company can begin receiving funds as its project hits negotiated benchmarks.
The US$3.87 billion site will focus on packaging chips sent to the US from SK Hynix plants in its home country. It’s part of an overall pledge to invest as much as US$15 billion in US packaging and other research projects, the company has said.
SK Hynix is one of three makers of so-called high-bandwidth memory chips, which are essential components of computers used to create artificial intelligence software. The company leads rival Samsung Electronics in the introduction of new chips for that market, and is a key supplier to Nvidia.
While it will still manufacture its chips in Asia, its expansion to the US for packaging – the process of encasing chips to connect them to devices – demonstrates a desire to diversify its geographic footprint.
Domestic packaging capabilities are a key focus of officials implementing the 2022 Chips and Science Act, a landmark bipartisan programme that’s triggered more than US$400 billion in promised investment from companies.
Commerce Secretary Gina Raimondo, whose agency is in charge of disbursing US$39 billion for manufacturing as well as US$11 billion for research and development, wants to ink as many deals as possible before leaving office in January. BLOOMBERG
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