Biden Administration Awards $450 Million Grant to SK Hynix for Indiana Chip Facility
The Biden administration announced on Tuesday its decision to grant up to $450 million to SK Hynix, a prominent South Korean semiconductor manufacturer, to support the establishment of its new chip facility in Indiana. This initiative is being hailed as a significant step towards revitalizing the U.S. semiconductor manufacturing sector.
According to Commerce Secretary Gina M. Raimondo, this announcement signifies that the United States now has commitments from all five of the globe’s leading-edge semiconductor manufacturers to develop chip plants on American soil with the aid of financial support from the administration. These manufacturers include Intel, Taiwan Semiconductor Manufacturing Company, Samsung, and Micron, which have all previously reached agreements for investments in the U.S.
Raimondo emphasized the significance of these companies, stating, “These are the only firms in the world capable of producing leading-edge chips at scale.”
In April, SK Hynix publicly announced its commitment to invest $3.87 billion in a new facility located in West Lafayette, Indiana. Raimondo referred to this investment as a “huge deal,” noting its importance for the United States in achieving “the most secure and diverse supply chain in the world for the advanced semiconductors that power artificial intelligence.” SK Hynix is particularly known for producing advanced memory chips, which are crucial for the development of A.I. technologies.
Officials from the Commerce Department revealed that, with the grant awarded to SK Hynix, the United States has now allocated over $30 billion from a total of $39 billion designated for funding under the CHIPS Act. This bipartisan legislation aims to bolster domestic chip manufacturing and reduce the nation’s reliance on Asian countries for essential semiconductors.
Currently, the United States accounts for only about 10 percent of the global semiconductor production, a steep decline from approximately 37 percent in 1990. Reversing this downward trend has become a pivotal objective for President Biden and a central theme of his economic policy agenda.
