South Korean chipmaker chooses Indiana for cutting-edge plant, report says

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Allegion’s electronic locks and access-control products depend on semiconductor- built circuit boards, like the one being worked on here. A global semiconductor shortage has forced Allegion to sharpen its supply-needs forecasting. (IBJ photo/Eric Learned)

SK Hynix, a semiconductor chip maker based in South Korea, plans to build a cutting-edge packaging plant in Indiana, according to report Thursday in the Financial Times.

The move would give a boost to the U.S. Department of Commerce’s recently launched, $3 billion effort to stimulate the domestic chip-packaging industry.

The Indiana plant will be funded out of a $22 billion investment in the U.S. that was announced by the SK Group conglomerate’s chair Chey Tae-won during a public conference call with President Biden in 2022, according to the Financial Times report.

The location and cost of the plant are unclear. The Financial Times story is based on unnamed sources who have knowledge of the plan. Representatives of SK Hynix told FT that “our official position is that we are currently considering a possible investment in the US but haven’t made a final decision yet.”

A representative of the Indiana Economic Development Corp. told IBJ on Thursday that the agency would not comment about any specific developments.

“As semiconductor companies around the world consider North American location options, Indiana continues to become a global destination for this growing industry thanks to our highly skilled workforce, central location, strong communities and long-term partnership approach. Regarding specific projects, we are unable to confirm or comment, as all economic development negotiations are confidential,” said Erin Sweitzer, vice president of external communications for IEDC.

According to the Financial Times, SK Hynix is the world’s leading producer of high-bandwidth memory chips, crucial components in Silicon Valley giant Nvidia’s graphics processing units, which are used to train systems such as Open AI’s ChatGPT.

Packaging refers to the process of putting together individual chips for use in commercial products like phones and cars, as well as military applications including nuclear missiles. The Commerce Department says the U.S. has just 3% of the world’s packaging capacity—compared with an estimated 38% in China—which Washington worries has left the country vulnerable.

The U.S. packaging program is the first major research and development investment from the 2022 Chips and Science Act, which aims to revive semiconductor production in the U.S. as the development of critical electronic components has become a geopolitical battleground between the U.S. and China.

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15 thoughts on “South Korean chipmaker chooses Indiana for cutting-edge plant, report says

    1. I have the same question. I thought that $50B development was supposed to be announced by the end of 2023.

  1. IC packaging is not as resource (water) intensive as wafer fab. I would not expect this to cause any adjustments to the LEAP district usage estimates if that is indeed where this plant would go

  2. What about the Gm stamping plant area and 16 tech? Those areas are shovel ready for companies but everyone is choosing to build outside of Indy. Indy is obviously competing with its surrounding suburbs.

    1. Regarding development in the Indy metro, there is simply too much red tape from federal, state and local government. It’s cheaper and easier to develop outside of Indianapolis. Of course, that could all be mitigated, but it won’t be.

    2. …because the state purposely hinders Indianapolis, because state Republicans can’t stand they the state’s economic engine, Indy, is democratic. Sad and sickening. And unsustainable. Indy has punched above its weight for so long, compared to peer cities. And peer cities like Cincinnati and Columbus and Nashville don’t have home legislatures trying to tank their home cities. So it’s remarkable that Indy able to do as well as it does, given the state is stacked against it. But the days of Indy’s success are certainly numbered, given the current circumstances.

    3. GM Stamping Plant space is mostly being utilized by Elanco HQ move. My guess is the size/footprint of this facility would be larger than what is left at GM Stamping or 16Tech and requires it to be where more land is available. Which Indy has a few sites remaining in the inner core and on periphery where it could go. Should there be accurate access. That’s why most of these large plants are outside of Marion county. Not because of red tape crap. But more of IEDC working with other communities on ‘shovel ready sites’. Some of indys existing available spots are brownfields and need mitigated. Dave S. There is red tape at each of those levels all across the state. And for something like this Indy local leaders would be eliminating red tape to get them here. If the IEDC gods allow it.

    1. I was thinking the place down in Clarksville near where Meta’s 800 million dollar project will be.

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