The funds will be disbursed based on SK Hynix’s completion of project milestones. Credit: JHVEPhoto/Shutterstock.

The US Commerce Department has awarded $458m in funding to memory chip maker SK Hynix for developing an advanced chip packaging facility in Indiana.

This funding, under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities, will support SK Hynix’s $3.87bn investment in a memory packaging plant for artificial intelligence (AI) products and research and development facility.

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This investment is aimed at addressing a critical gap in the US semiconductor supply chain.

The funds will be disbursed based on SK Hynix’s completion of project milestones.

The project is expected to create around 1,000 new jobs and hundreds of construction jobs, further establishing a research hub in Indiana through a partnership with Purdue University.

Furthermore, the project will focus on next-generation high-bandwidth memory research, development, mass production, and packaging, enhancing the US semiconductor ecosystem.

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In addition to the $458m funding, the CHIPS Programme Office will provide up to $500m in loans to SK Hynix, part of the $75bn loan authority from the CHIPS and Science Act.

US Secretary of Commerce Gina Raimondo said: “By investing in companies like SK Hynix and communities like West Lafayette, the bipartisan CHIPS and Science Act continues to supercharge America’s global technology leadership.

“With this investment in SK Hynix – the world’s leading producer of high-bandwidth memory chips – and their partnership with Purdue University, we are solidifying America’s AI hardware supply chain in a way no other country on Earth can match, creating hundreds of jobs in Indiana, and ensuring the Hoosier State plays an important role in advancing US economic and national security.” 

In July 2024, SK Hynix announced plans to invest $74.6bn by 2028 to bolster its chip business after the company suffered heavy losses to its electric vehicle battery arm.