SK hynix breaks ground on first US factory, targeting HBM dominance

SK hynix is set to hold a ground-breaking ceremony Thursday (local time) for its first production facility in the United States, as the site gradually takes shape and the outline of an advanced packaging factory aimed at the AI market comes into view.

According to industry sources and local media, foundation work began in April with the pouring of concrete, and three months on, the structural frames and columns forming the building's skeleton are now standing. Work to install the pillars and roof that will support the second floor is expected to begin by year's end.

SK hynix announced plans in April 2024 to build an advanced packaging production facility in West Lafayette, Indiana, and is now marking the formal start of full-scale construction — two years and four months after that announcement.

The ceremony is expected to highlight AI semiconductor cooperation between South Korea and the United States, with SK hynix President Kwak Noh-jung attending alongside officials from the US Department of Commerce, the Indiana state government and the city of West Lafayette.

Whether SK hynix will announce additional US investment plans at the event is also drawing attention. Last month, US Commerce Secretary Howard Lutnick attended a concrete-pouring ceremony at US memory maker Micron's Clay megafab in New York state, where he called on SK hynix and Samsung Electronics to build memory chip factories in the United States.

The Indiana factory will receive a total investment of $3.87 billion and sit on a 540,000-square-meter site — roughly the equivalent of 75 soccer fields — making it the largest single development project in Indiana state history.

SK hynix aims to begin mass production of AI memory chips, including high-bandwidth memory, at the facility in the second half of 2028. The project is expected to create about 7,000 direct and indirect jobs across construction, research and development, and operations.

West Lafayette Mayor Erin Easter told the city's redevelopment commission last Wednesday that SK hynix's investment would generate $500 million in tax revenue over 30 years through 2055, according to local media.

SK hynix will also receive subsidies of up to $712.18 million under an agreement signed with the Indiana Economic Development Corporation in June 2024, also through 2055, the same outlet reported.

Indiana is working to position itself as a key semiconductor hub in the US Midwest — dubbed "Silicon Heartland" — having already attracted R&D operations from Taiwanese fabless chipmaker MediaTek and IMEC, the world's largest semiconductor research institute.

As part of that effort, Indiana is working to pool the capabilities of major companies, local universities and research institutions. SK hynix's investment is a prime example.

SK hynix is also counting on its Indiana presence to help secure skilled engineers and strengthen its R&D capabilities, given that Purdue University — renowned for its advanced engineering research, including semiconductors — is located there. The company has recently begun recruiting staff to handle corporate communications and external affairs in the local community.

Having secured a leading position in the AI memory market through HBM, SK hynix expects its sales activities targeting major US tech customers to gain further momentum with the establishment of the advanced packaging facility in the United States.

Nvidia CEO Jensen Huang had already signaled his enthusiasm for the project, personally introducing the Indiana factory at the GTC 2025 technology conference in Washington, D.C., last October.

TSMC, which works closely with SK hynix on HBM manufacturing, has already begun producing Nvidia's latest AI accelerator, Blackwell, at its Arizona factory, which it built last year.

With SK hynix's HBM set to be produced on US soil in two years, analysts expect the alliance among the three companies — which have forged a strong partnership in the AI sector — to grow even stronger.