SK Hynix of South Korea Will Start A US Chip Facility In 2023.

SK Hynix of South Korea plans to select a US location for its advanced chip packaging plant and break ground there in the first quarter of next year, according to two people familiar with the matter, helping the US compete as China pours money into the burgeoning sector.

The plant, which is expected to cost “several billions,” would begin mass production in 2025-26 and employ approximately 1,000 people, according to one of the sources, who declined to be identified because the plant’s details have not been made public.
According to the source, it would be near a university with engineering talent.

According to one of the sources, the company “hopes to make a site selection and break ground sometime around the first quarter of next year.”

The new plant was announced last month as part of a $22 billion US-based investment package in semiconductors, green energy, and bioscience projects by SK Group, South Korea’s second-largest conglomerate.

The White House announced that $15 billion would be allocated to the semiconductor industry through research and development programs, materials, and the establishment of an advanced packaging and testing facility.
“R&D investments will include the establishment of a nationwide network of R&D partnerships and facilities,” the source said, adding that the packaging facility would combine SK Hynix memory chips with logic chips designed by other US companies for machine learning and artificial intelligence applications.

Following the recent report about the timing of the groundbreaking, the  South Korean company confirmed that it plans to select a site for the plant in the first half of next year, but no decision has been made on when construction will begin.

Most basic, low-value chip packaging operations were long ago outsourced to overseas factories, mostly in Asia, where chips are placed into protective frames and then tested before being shipped to electronics manufacturers.

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However, new battle lines are being drawn in the race to develop advanced packaging techniques, which involve combining multiple chips with different functions into a single package, enhancing overall capabilities while limiting the added cost of more advanced chips.

“While the United States and its partners have advanced packaging capabilities, China’s massive investments in advanced packaging threaten to upend the market in the future,” the White House stated in a report released in 2021.
According to the report, an executive at China’s top chipmaker SMIC, which was added to a US trade blacklist in 2020, stated last year that Chinese companies should focus on advanced packaging to overcome their weaknesses in developing more sophisticated chips.

The move by SK Group of South Korea comes after Biden signed the CHIPS Act into law this week, which provides $52 billion in subsidies for chip manufacturing and research, as well as an estimated $24 billion investment tax credit for chip plants. According to the sources, both the R&D facilities and the chip packaging plant would be eligible for the funding.

In recent years, chipmakers in the United States have announced a flurry of expansion plans, ranging from Taiwan Semiconductor Manufacturing Co to Samsung Electronics and Intel.

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