United States 'new silicon heartland': SK hynix will invest $3.87B in West Lafayette

WEST LAFAYETTE, Ind. — It’s official. SK hynix Inc., the world’s leading producer of high-bandwidth memory chips, will invest an estimated $3.87 billion in West Lafayette to build an advanced packaging fabrication and research and development facility for artificial intelligence products.

This news came as leaders from the United States, South Korea, SK hynix, Indiana, Purdue University and West Lafayette shared the stage at Wednesday's announcement and discussed one of the largest economic investments in Indiana’s history. The new facility represents the state’s leadership in the growth of AI development.

“We are excited to become the first in the industry to build a state-of-the-art, advanced-packaging facility for AI products in the United States that will help strengthen supply-chain resilience and develop a local semiconductor ecosystem,” SK hynix CEO Kwak Noh-Jung said.

“With this new facility, we hope to advance our goal of providing AI memory chips with unmatched capabilities, serving the needs of our customers.”

SK hynix will construct a 430,000-square-foot facility on 90 acres of land at the Purdue Research Park in West Lafayette. The facility will be an advanced semiconductor packaging production line that will mass produce the latest high-bandwidth memory chips aimed at supporting high-end graphic processing chips focused on developing AI systems.

This new semiconductor facility is expected to be constructed by 2028 and bring up to 800 high-wage to jobs to the region.

When asked how much these wages would be, SK hynix leadership said the specific amount is not yet determined but noted that they would be “competitive.”

Noh-Jung described this project as being the foundation for the United States' “new silicon heartland” with Indiana leading the country into this new realm of technological growth.

“Indiana is a global leader in innovating and producing the products that will power our future economy, and today’s news is proof positive to that fact,” Gov. Eric Holcomb said.

“This new semiconductor innovation and packaging plant not only reaffirms the state’s role in the high-tech sector but is also another tremendous step forward in advancing U.S. innovation and national security, putting Hoosiers at the forefront of national and global advancement,” Holcomb said.

Purdue University President Mung Chiang said the state of Indiana and Purdue have been in a two-year “tournament” trying to court SK Hynix to invest in the Purdue educational ecosystem and West Lafayette.

Chiang said that Indiana and the university made the final four of this tournament and ultimately, took home the trophy of becoming the new home for SK hynix's state-of-the-art facility.

Chiang did not share the other three states that were in the final four of this economic development tournament.

A major factor in SK hynix’s decision to partner with Purdue University was the state’s consistent interest in developing a partnership with South Korea and South Korean industries.

In late 2022, Holcomb and Chiang flew to Tapia and met with ambassadors from Taiwan and South Korea to help cultivate relationships with both countries.

Another contributing factor to the decision was the United States' commitment to investing in and revitalizing America’s semiconductor industry with the passage of the CHIPS and Science Act in 2022.

“As soon as the president signed it, this administration moved out and started implementing it," said Arati Prabhakar, director of the White House Office of Science and Technology Policy, and assistant to the president for science and technology. "That bill has many different components, a major part is about manufacturing incentives and tax incentives, so that we can have leading-edge semiconductors back here in the state.

“That legislation recognized that if we’re going to succeed, we need to build our relationships with our global allies and the Biden administration has promoted foreign direct investment and deepened ties with our allies.”

Prabhakar highlighted U.S. Sen. Todd Young's leadership and pivotal role in both developing the CHIPS and Science Act and building bi-partisan support for this piece of legislation to ensure it would get passed in the U.S. Senate.

“For me, this journey began roughly four years ago, it was then when I introduced a piece of legislation known as the ‘Endless Frontier’ Act. The intent was simple, to invest in emerging technologies, so that we could make our country more safe at the same time we made our county more prosperous,” Young said.

That bill ultimately evolved into the CHIPS and Science Act which later became law.

The Indiana Economic Development Corp. also announced that it committed a $3 million investment with SK hynix in incentive-based training and manufacturing readiness grants, and up to $80 million in conditional structured performance payments. The economic development corporation also offered up to $554.7 million of Innovation Development District tax rebates.

The company will collaborate with Purdue University and Ivy Tech Community College to develop training programs and interdisciplinary degree curricula that will cultivate a high-tech workforce and build a reliable pipeline of new talent.

“With this tiny nand size chip, we are going to change the world, and the great state of Indiana will be in the center of that change,” Woojin Choi, SK hynix executive vice president said.

Noe Padilla is a reporter for the Journal & Courier. Email him at Npadilla@jconline.com and follow him on X at 1NoePadilla.

This article originally appeared on Lafayette Journal & Courier: SK hynix will invest $3.87B in West Lafayette semiconductor industry