SK Hynix is in exploratory talks with Intel regarding manufacturing its memory chips in the United States for the first time, a move that could significantly benefit Intel's foundry business. Reports indicate that SK Hynix might lease a portion of Intel's chipmaking facility in Ohio, or alternatively, form a joint venture with Intel and major cloud providers who are keen to secure memory chip supplies. This news led to a notable increase in stock prices, with Intel rising 3.2% and SK Hynix's Nasdaq-listed shares gaining 2.6% in premarket trading.
The potential deal is viewed as a major win for Intel, which has been actively seeking high-profile customers for its manufacturing operations, a core part of CEO Lip-Bu Tan's strategic vision. It also aligns with the U.S. government's push to onshore more semiconductor manufacturing. SK Hynix, a leading supplier of high-bandwidth memory (HBM) crucial for AI applications, is already expanding its U.S. presence with a $4 billion advanced packaging facility under construction in Indiana, targeting mass production by the second half of 2029. The company has experienced substantial growth due to the AI boom, leading to increased demand and profits for memory chips.
While the talks are exploratory and no final decisions have been made, the prospect of U.S. memory chip production by SK Hynix faces potential hurdles, including higher labor and construction costs in the U.S., and the challenge of building a local supply chain. The South Korean government might also review such an investment, especially if it involves national core technologies, due to concerns about technology leakage and domestic industrial competitiveness. U.S. Commerce Secretary Howard Lutnick has also reportedly pressured South Korean companies with tariff threats to increase production on American soil. Despite these challenges, chairman Chey Tae-won of SK Group has expressed the company's need to build a factory in the United States due to customer and country pressure.
