SK Hynix CEO says Indiana will be key memory production base by 2030, first U.S. facility now underway

SK Hynix, the South Korean memory maker that's emerged as one of the biggest winners in the AI boom, is bolstering its U.S. presence, with a new factory in Indiana that CEO Kwak Noh-Jung says will make the state a "key HBM production base in America" by 2030.

Speaking at the groundbreaking for SK Hynix's first U.S. facility on Thursday in the city of West Lafayette, Kwak emphasized the need for high-bandwidth memory, which faces a critical global shortage due to insatiable demand from artificial intelligence.

"We will provide our customers with a new source of made-in-U.S. HBM, while strengthening the U.S. semiconductor supply chain and contributing to national and economic security," Kwak said.

SK Hynix is the HBM market share leader, and is in the midst of a $720 billion buildout to make more, with the vast majority of that expansion taking place in its home country, where the company is constructing the largest memory fab campus in the world. Production there will start in February.

The $4 billion Indiana factory will be for packaging, instead of front-end manufacturing, meaning it's where memory chips will be stacked and connected together. Chips will be manufactured in South Korea and China, and some will then be sent to Indiana. The first cleanroom, where the packaging will take place, is scheduled to open in October 2028, Kwak said Thursday.

While packaging is a critical step in chipmaking, Commerce Secretary Howard Lutnick in July called on SK Hynix and top rival Samsung to build front-end chip fabs in the U.S.

Kwak said SK Hynix is looking for the right opportunity and is "open to every every site or every country." He also said that, "SK Hynix will continue to expand its investment and cooperation in America."

SK Hynix, which trades on the Korea Exchange, listed shares on the Nasdaq in July, raising $26.5 billion, the most for any foreign company on U.S. markets. The stock is trading slightly below its first-day close and has been subject to volatility in the AI trade and Korean market as a whole.

Still, SK Hynix's market cap is up about sevenfold over the past year, topping $1 trillion.

In an interview with CNBC in July, Chey Tae-won, CEO of affiliate SK Group, said SK Hynix has been studying possible sites for more than a month.

"I'm willing to do it, but the problem is that I really have to find the right place," he said.

SK Hynix began construction in Indiana in April. Thursday's ceremony was the formal kickoff for what Indiana Republican Governor Mike Braun said will be the "biggest development project in Indiana's history," and the the "first of its kind in the country."

"For too long, the United States designed many of the world's most advanced chips, while allowing too much of the manufacturing ecosystem to migrate overseas," Indiana State Senator Todd Young, also a Republican, said Thursday, citing efforts to onshore production. "Breaking ground here today is evidence that that vision is being realized."

Kwak said SK Hynix's total U.S. investments and assets are expected to exceed $45 billion by 2030. That includes a $10 billion "AI Company" launched in January, and subsidiary Solidigm, created when SK Hynix bought Intel's NAND business for $9 billion in 2020.

To help with the new Indiana factory, the company is receiving up to $458 million of federal CHIPS Act funds and a state incentive package worth up to $712 million, the second largest in state history, according to the Indiana Economic Development Corporation.

Announced in 2024, the 133-acre site will include the packaging fab and research and development centers where top AI customers can work alongside SK Hynix on developing memory. It's a growing opportunity, as SK Hynix works on next-generation memory chips that can be custom built along with the AI accelerators housing them.

Nvidia, the leading AI chipmaker, has commitment to co-develop memory with SK Hynix, as part of a $500 billion deal with SK Group announced in July.

SK Hynix told CNBC the Indiana facility will create around 1,000 direct jobs, and an additional 6,000 jobs related to construction and business partners.

For the initial stages of the project, SK Hynix said it will bring employees over from South Korea on a temporary basis, but it plans to fill long-term roles with U.S. employees, including students from nearby Purdue University, which has a variety of semiconductor focused degrees.

"In 167 years at Purdue University, there has not been a bigger day than today," Mitch Daniels, Purdue's interim president and former governor of Indiana, said on Thursday.

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