SK hynix, Intel in talks to produce memory chips in US

SK hynix is in talks with Intel to produce memory chips on US soil for the first time, with discussions centering on leasing part of Intel's Ohio factory or establishing a joint venture that could include major cloud companies.

Reuters, citing multiple sources, reported Wednesday (local time) that SK hynix and Intel are in negotiations over domestic US memory chip production.

One leading option would have SK hynix lease a portion of the semiconductor facility Intel is building in Ohio. A separate arrangement — a joint venture involving Intel, SK hynix and major cloud companies seeking to secure a stable memory supply — is also being discussed, according to the sources.

The talks remain at an early stage and no decisions have been made, Reuters said. The report added that SK hynix may also be weighing other deal structures. If an agreement is reached, it would mark the first time SK hynix has produced memory chips directly in the United States.

It remains unclear what type of memory chips would be manufactured in the US. Should advanced products such as HBM or DRAM be produced there, the South Korean government would likely raise concerns over technology sensitivity.

South Korea's Ministry of Trade, Industry and Energy said decisions on overseas production are ultimately up to individual companies, but added that cases involving nationally designated core technologies could be subject to review under the Industrial Technology Protection Act.

Manufacturing semiconductors in the United States would also carry higher labor and construction costs than in South Korea, and the concentration of key supply chains in Asia could add further financial pressure.

Even so, industry observers say SK hynix has considerable incentive to pursue US production, given mounting pressure from the US government on chipmakers to expand their domestic manufacturing footprint.

US Commerce Secretary Howard Lutnick has warned that South Korean and Taiwanese chipmakers could face tariffs of up to 100 percent if they do not increase production in the United States.

SK Group Chairman Chey Tae-won also said in July that customers and governments were increasingly pressing for expanded semiconductor supply, and raised the need to build a factory in the US.

For Intel, a partnership with SK hynix could help ease the financial burden of its Ohio project. Intel announced in 2022 that it would invest up to $100 billion to build a large semiconductor complex in Ohio, but completion of two planned factories has since been pushed back to 2030 and 2031, respectively.

In a statement to Reuters, SK hynix said it "is reviewing various options, including establishing additional production bases, to strengthen the competitiveness of its memory chip business," but added that "no decisions have been made at this stage."