SK Hynix Could Manufacture Memory Chips in US for the First Time

SK Hynix is in exploratory discussions with Intel over a feasible agreement that could see the South Korean firm manufacture memory chips in the United States for the first time, according to Reuters, citing three residents familiar with the discussions.

Key points

• SK Hynix last month approved regarding $38.3 billion in investments through 2031 for new DRAM and NAND production facilities in South Korea.
• Intel confirmed aims in 2022 to invest up to $100 billion in a major chipmaking complex in Ohio.
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• While SK Hynix shares finished 4.1% higher in Seoul, intel shares rose 5.5% at the open after the report.
• The South Korean administration has been encouraging SK Hynix and Samsung to accelerate domestic semiconductor investment.

One option under discussion would involve SK Hynix leasing part of Intel's long-planned semiconductor facility in Ohio. Another possibility is a joint venture involving SK Hynix, Intel and major cloud firms looking to secure memory chip supplies.

No agreement has been finalized, and Reuters could not determine what type of memory SK Hynix would produce in Ohio if a accord moves ahead. The firm makes DRAM, NAND flash, and high-bandwidth memory employed in AI systems. Smartphone RAM and Storage Could Obtain Even More Expensive. Accord Could Assist Intel's Delayed Ohio Project.

For context, a partnership could additionally ease some of the financial pressure on Intel.

Intel confirmed aims in 2022 to invest up to $100 billion in a major chipmaking complex in Ohio. Production was originally projected to commence in 2025, but completion of the two plants has since been pushed back to 2030 and 2031.

While SK Hynix shares finished 4.1% higher in Seoul, intel shares rose 5.5% at the open after the report. South Korean Approval Could Become an Matter.

Notably, a potential obstacle is whether the South Korean administration would allow advanced memory technology to be manufactured in the US.

In practice, the sources remarked a agreement involving technologies such as HBM or DRAM could face opposition since South Korea considers them sensitive.

South Korea's trade ministry remarked the decision would ultimately be SK Hynix's, but any agreement involving a "national core technology" would require a review under the country's Industrial Technology Protection Act.

SK Hynix remarked it is reviewing different options, including further production bases, to improve the competitiveness of its memory business, but stressed that no decision has been created.

Intel declined to comment on the documented negotiations and noted it continues to invest in preparing its Ohio site. CXMT May Beat Samsung and Micron to LPDDR6 RAM Production. Pressure to Expand US Chip Production.

Manufacturing semiconductors in the US is considerably more expensive than in South Korea since of higher labor and construction costs and the concentration of much of the semiconductor supply chain in Asia.

Even so, SK Hynix is facing increasing pressure from customers and governments to expand production as the AI boom drives demand for memory chips.

SK Group Chairman Chey Tae-won remarked in July that the business was under solid pressure to supply more chips and believed it should build a factory in the United States if feasible.

Meanwhile, the South Korean administration has been encouraging SK Hynix and Samsung to accelerate domestic semiconductor investment.

US Commerce Secretary Howard Lutnick has additionally threatened tariffs of up to 100% on South Korean and Taiwanese businesses unless they commit to increasing semiconductor production in the United States.

For now, discussions between SK Hynix and Intel remain exploratory, with no final structure, production plan, or agreement confirmed. Stay Connected with ProPakistani.

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Taken together, the developments around SK Hynix Could Manufacture Memory Chips in US for the First Time point to a situation that is still moving, and the coming days should bring more clarity.