Forward-looking: SK Hynix is reportedly bringing its manufacturing expertise to the US. Sources familiar with the matter told the Financial Times that the South Korean memory maker will build a packaging plant in Indiana that will focus on turning ordinary dynamic random access memory chips into high-bandwidth memory (HBM) chips through a process called stacking.
People familiar with SK Hynix's plans said the HBM created in Indiana will be paired with Nvidia GPUs. Existing HBM chips from SK Hynix are manufactured in South Korea and shipped to Taiwan, where contract manufacturer TSMC integrates them into Nvidia products.
TSMC is currently building a pair of production facilities in Arizona. According to Kim Yang-paeng, a researcher at the Korea Institute for Industrial Economics and Trade, with TSMC's Arizona plants and SK Hynix's Indiana facility, Nvidia could eventually have the capability to produce GPUs in the US.
An unnamed US official told the Financial Times that the overall idea is to have more advanced chips produced in the US, and to reduce reliance on Taiwan for such hardware. It's one thing to fabricate chips in the US but when you then ship them overseas for packaging, it creates supply chain and national security risks, the Biden administration said.
As of 2021, the US possessed just three percent of the world's total chip packaging capability.
SK Hynix will also benefit from the new facility. By more deeply integrating into Nvidia's supply chain, the South Korean company will be in a better position to fend off other HBM makers including Micron and Samsung that are also vying for Nvidia's business.
It's worth noting that SK Hynix has not officially confirmed the Indiana HBM facility. In a statement issued to FT, the company said its official position is that it is considering a possible investment in the US but they haven't made a final decision yet.
Even if an announcement were to come soon, it would still be years before the facility was completed and ready for production.