2 hrs ago
SK Hynix, Intel Explore First U.S. Memory Chip Manufacturing Deal
SK Hynix makes memory chips used in computers, phones, servers, and artificial-intelligence machines.
It is talking with Intel about making some of those chips in the United States.
One idea is for SK Hynix to rent part of Intel’s planned factory in Ohio.
Another idea is for the companies to work with large cloud businesses.
Making chips in America costs more than making them in South Korea.
However, customers and the U.S. government want more chips made in the United States.
South Korea may review the plan if it involves sensitive technology.
The companies have not made a final decision.
SK Hynix is exploring a deal to manufacture memory chips at an Intel facility in Ohio.
Possible structures include leasing part of Intel’s site or forming a venture with cloud companies.
The discussions could help Intel financially and address U.S. memory-chip supply shortages.
South Korean approval could be required if advanced or nationally sensitive technologies are involved.
No agreement has been reached, and manufacturing costs in the United States are higher than in South Korea.
- Who
- SK Hynix and Intel, potentially with major cloud companies, are involved in exploratory discussions.
- What
- The parties are considering a deal for SK Hynix to manufacture memory chips at Intel’s planned Ohio facility.
- Where
- The potential manufacturing would take place in Ohio, United States; SK Hynix is also building a packaging facility in Indiana.
- When
- The discussions are ongoing; Intel announced its Ohio investment in 2022, with production now delayed to 2030 and 2031.
- Why
- The proposal could expand U.S. memory-chip production, meet customer demand, support Intel, and respond to U.S. pressure for domestic semiconductor manufacturing.
Arguments for U.S. production
Concerns about the proposal
Domestic chip manufacturing
Arguments for U.S. production
U.S. officials and customers want more memory chips produced in the United States, particularly amid an AI-driven supply shortage.
Concerns about the proposal
Manufacturing in the United States is substantially more expensive, with higher labor and construction costs and much of the supply chain still based in Asia.
Technology and national interests
Arguments for U.S. production
A deal could strengthen U.S. semiconductor capacity and help Intel use its delayed Ohio facility.
Concerns about the proposal
South Korea could review the arrangement under its Industrial Technology Protection Act if it involves a national core technology such as advanced memory.
Strategic commitments
Arguments for U.S. production
SK Hynix faces pressure from customers and governments to build more production capacity in America, while the deal could ease Intel’s financial strain.
Concerns about the proposal
Seoul is also urging SK Hynix and Samsung Electronics to accelerate new chipmaking facilities in South Korea, creating competing priorities.
Key facts
- Potential Ohio arrangement
- SK Hynix could lease part of Intel’s planned Ohio chipmaking facility.
- Alternative structure
- SK Hynix, Intel, and major cloud companies could form a venture to secure memory supplies.
- Technology involved
- The sources did not establish which chips would be made; SK Hynix produces DRAM, NAND flash, and high-bandwidth memory.
- Intel Ohio investment
- Intel announced in 2022 that it could invest up to $100 billion in an Ohio chipmaking complex.
- Production schedule
- The two Ohio plants’ expected completion dates have been delayed to 2030 and 2031.
- Cost difference
- Manufacturing semiconductors in the United States costs more than in South Korea because of labor, construction, and supply-chain expenses.
- Current status
- The talks are exploratory, and SK Hynix said no matters have been determined.
Quotes
Chey Tae-won
Chairman of the SK Group conglomerate, SK Hynix’s parent company
“I think we need to build a factory in the United States. If possible, I believe we should build it.”
livemint.com
Sources
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