WEST LAFAYETTE — Federal, state and local political figures gathered at Purdue University Wednesday for a major economic development announcement.
South Korea-based SK Hynix Inc. announced it will be building a 430,000-square-foot facility on 90 acres at the Purdue Research Park in West Lafayette.
The new facility will be home to an advanced semiconductor packaging production line that will mass produce next generation HBM, the highest-performing Dynamic Random Access Memory (DRAM) chips, which are the critical components of graphic processing units (GPUs) that train AI systems.
The facility will also develop future generations of chips and house an advanced packaging R&D line.
The demand for the chips created at semiconductors facilities is high.
During the pandemic, there was a shortage of this critical technology due to a supply chain issue. To help bolster the supply chain and manufacture more of this critical technology in the United States, congress passed the Chips and Science Act.
"Obviously, that act made this possible,” Indiana Gov. Eric Holcomb said.
Gov. Holcomb says Indiana was competing with several other states to win the bid.
SK Hynix says they chose Indiana because of it's business friendly environment. That environment is something Sen. Todd Young says is bringing more business to the state.
"I can't mention specific companies because I don't have their permission to do so,” Sen. Young said. “There are companies with whom I have been in touch, and I know the governor's office has been in touch, to locate here to make next generation hardware, including semiconductors.”
According to the company, it plans to begin mass production in the second half of 2028.
The majority of the technology built in this facility will power artificial intelligence, which uses the chips that will be created to function.
“We are excited to become the first in the industry to build a state-of-the-art advanced packaging facility for AI products in the United States that will help strengthen supply-chain resilience and develop a local semiconductor ecosystem,” said SK Hynix CEO Kwak Noh-Jung. “With this new facility, we hope to advance our goal of providing AI memory chips with unmatched capabilities, serving the needs of our customers.”
The company will get several incentives for investing in Indiana.
Based on the company’s phase one investment plans, the Indiana Economic Development Corporation (IEDC) committed an investment in SK Hynix of up to $3 million in incentive-based training grants, up to $3 million in Manufacturing Readiness Grants and up to $80 million in conditional structured performance payments.
Politicians weren’t clear on what exactly the performance incentives will be or are.
The IEDC also offered up to $554.7 million of Innovation Development District tax rebates with the flexibility for the project to grow to $4.644 billion in capital investment. The IEDC committed up to $45 million through the Industrial Development Grant Fund to support infrastructure improvements surrounding the new plant.
These incentives are performance-based, meaning the company is eligible to claim state benefits once investments are made.
The governor’s office says the jobs that will be created by this facility will be high paying and become available by the end of 2030.
