Will SK hynix build a front-end fab too? Samsung, Micron and TSMC race to invest in US

The groundbreaking of SK hynix's packaging factory in Indiana is drawing fresh attention to a bigger question: whether the company — and its Korean rivals — will commit to building front-end semiconductor fabrication plants on US soil. The need for a US production base has been a recurring topic, given that North American hyperscalers and AI accelerator companies are the largest customers for memory chips.

Washington has been pressing Korean chipmakers on all fronts to build production facilities domestically, and SK Group Chairman Chey Tae-won has already signaled that he is scouting potential sites — raising expectations of a follow-on investment.

SK hynix is holding a groundbreaking ceremony Thursday for its advanced packaging factory in West Lafayette, Indiana. The facility is expected to begin mass production of HBM and other AI memory products in the second half of 2028.

But demand from the US market is pushing beyond back-end packaging toward front-end fabs. AI chips are increasingly customized to individual customer specifications rather than sold as off-the-shelf products, and analysts say a US production base would allow chipmakers to work directly with Big Tech engineering teams to shorten product optimization cycles.

Pressure from Washington has also intensified. US Commerce Secretary Howard Lutnick called for Korean chipmakers to invest in memory fabs in the United States at a concrete-pouring ceremony for Micron's Clay, New York plant on July 9 (local time).

"I want to bring Samsung Electronics and SK hynix to America and have them build production facilities," Lutnick said. "Micron is leading the way, so the competitors will feel jealous and ultimately have no choice but to follow."

SK Group is weighing additional investment of its own. In an interview with CNBC on Aug. 13 (local time), Chey said US customers want fabs built inside the country. "If that is what our customers want, we want to pursue this opportunity together," he said.

He added that SK Group is prepared to build a fab "anywhere in the world, including the United States," provided the necessary water, power, land and ecosystem are in place. "We have been examining multiple locations, including in the US, from various angles for more than a month," he said.

Other chipmakers have already been announcing US investment plans in rapid succession. Samsung Electronics, Micron and TSMC have all committed to expanding in the United States, the epicenter of AI demand.

Samsung Electronics has officially announced an expansion of its foundry plant in Taylor, Texas, moving quickly to scale up capacity as orders from Big Tech customers grow, particularly for advanced 2-nanometer processes.

At a second-quarter earnings conference call late last month, Samsung Electronics foundry division Vice President Kang Seok-chae said the company is preparing to begin construction on a second Taylor fab by the end of this year, targeting mass production in 2030 to meet rising customer demand in a timely manner.

Samsung Electronics decided in 2021 to invest in a new foundry line in Taylor, applying advanced fabrication processes with an eye on growing demand for AI and high-performance computing. The company had committed $37 billion at its US semiconductor production base through 2030, a figure now expected to grow further with the expansion.

Micron is also deep into domestic investment. Early last month, the company said it would increase its US semiconductor factory investment to more than $250 billion through 2035, up from the $200 billion announced last year — an addition of $50 billion.

Micron is building the largest semiconductor production complex in the United States in Clay, New York — a cluster of four fabs where site preparation began in January. A concrete-pouring ceremony last month marked the start of full-scale construction. The company is also accelerating work on a factory in Idaho. The first fab is expected to begin shipping wafers in mid-2027, with the second fab targeting mass production in the second half of 2028.

Taiwan's TSMC, the world's largest foundry, announced last month that it would increase its Arizona investment from $165 billion to $265 billion. TSMC Chief Financial Officer Wendell Huang made the plan official in an interview with US media, saying the company had confirmed strong long-term demand and would strengthen its US production capacity accordingly.

Once the investment is complete, the Arizona cluster will house 10 wafer fabs, two packaging facilities and one research and development center. The first fab is already in operation, the second is awaiting equipment installation, and the third is currently under construction.