By Kenrick Cai and Heekyong Yang
WEST LAFAYETTE, Indiana, Aug 27 (Reuters) – South Korean chipmaker SK Hynix said on Thursday it plans to begin volume production of its next-generation HBM4E chips at its Indiana facility in the third quarter of 2029, and expects the site to eventually reach annual capacity of hundreds of thousands of wafers.
The more than $4 billion project marks a major expansion of SK Hynix’s U.S. operations as surging investment in artificial intelligence drives demand for high-bandwidth memory, or HBM. The chipmaker seeks to bring production closer to major customers including Nvidia, Microsoft and Alphabet’s Google.
By 2030, the company expects Indiana to become a key HBM production base in the United States.
The facility, at the Purdue Research Park in West Lafayette, is scheduled to begin cleanroom operations in the second half of 2028, Chief Executive Kwak Noh-Jung said.
A cleanroom is a highly controlled manufacturing space that keeps dust and other microscopic contaminants out during the chipmaking process.
The site will house a next-generation HBM packaging line as well as an AI semiconductor research and development facility.
Kwak said SK Hynix aims to build an advanced memory supply chain in the United States.
HBM is a specialised memory chip that stacks chips vertically to deliver faster data processing while consuming less power, making it well suited to the enormous computing demands of AI applications.
Unlike conventional memory products, HBM chips are tightly integrated with AI processors, creating higher technological barriers to entry and giving suppliers greater pricing power. The product has emerged as a major growth driver for memory chipmakers after the industry’s recent downturn.
RACE TO BUILD DATA CENTERS
SK Hynix accounted for 58% of the global HBM market by revenue in the first quarter of 2026, according to Counterpoint Research, well ahead of Samsung Electronics and Micron Technology, which each held a 21% share.
Nvidia, a major customer for SK Hynix, forecast on Wednesday a 70% jump in revenue in the next fiscal year, underscoring unabated demand for AI computing and reassuring investors about the durability of the AI spending boom, even as memory shortages continue to constrain expansion.
SK Hynix expects the facility and related supply-chain investment to create about 7,000 direct and indirect jobs locally and contribute to semiconductor supply-chain resilience.
To help the company, the U.S. government finalised $458 million in grants and up to $500 million in loans under the CHIPS Act in December 2024.
Separately, SK Hynix’s board approved earlier this month about 54.3 trillion won ($38.30 billion) in investments through 2031, including 35.2 trillion won for the second phase of construction of its chip fabrication plants in South Korea.
(Reporting by Kenrick Cai in West Lafayette, Indiana, and Heekyong Yang in Seoul; Editing by Ed Davies and Lisa Shumaker)
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