SK Hynix Could Manufacture Memory Chips in US for the First Time

SK Hynix is reportedly in preliminary discussions with Intel that could lead to the South Korean firm manufacturing memory chips in the United States for the first time. According to Reuters, three sources familiar with the talks suggest that SK Hynix could lease space within Intel's planned Ohio semiconductor facility or form a joint venture with Intel and major cloud companies. The exact type of memory chips yet to be determined, as SK Hynix produces DRAM, NAND flash, and high-bandwidth memory utilized in AI systems.

If the partnership materializes, it may relieve some of Intel's financial burden. Intel had announced plans in 2022 to invest up to $100 billion in a large chipmaking complex in Ohio, though production dates have been pushed back to 2030 and 2031. Intel shares jumped 5.5% at the market open following the report, while SK Hynix shares closed 4.1% higher in Seoul.

One potential hurdle is South Korean government approval for manufacturing sensitive advanced memory technologies in the US. The sources indicated that a deal involving HBM or DRAM technologies might face opposition due to South Korea's perception of these technologies as sensitive. South Korea's trade ministry stated that the final decision would be up to SK Hynix, but any agreement involving a "national core technology" would need to be reviewed under the country's Industrial Technology Protection Act.

SK Hynix stated that it is evaluating various options, including additional production sites, to boost its memory business competitiveness, but stressed that no decision has been finalized.

SK Hynix is exploring additional production bases to improve the competitiveness of its memory business amid increasing pressure from customers and governments to expand production. AI boom has driven demand for memory chips. SK Group Chairman Chey Tae-won mentioned in July that the company is under significant pressure to supply more chips and believes it should build a factory in the United States if possible.

Simultaneously, the South Korean government has encouraged SK Hynix and Samsung to accelerate domestic semiconductor investments. SK Hynix approved around $38.3 billion in investments for new DRAM and NAND production facilities in South Korea by 2031.

US Commerce Secretary Howard Lutnick has threatened tariffs of up to 100% on South Korean and Taiwanese firms unless they commit to increasing semiconductor production in the United States. The talks between SK Hynix and Intel are still exploratory, with no final structure, production plan, or agreement confirmed.