① Diversifying foundry process away from TSMC

② Accelerating production and cutting costs

③ Deepening US localization push

Former SK hynix CEO Lee Seok-hee's move to Intel opens new channel between the two companies; loss-making Intel Foundry urgently needs major customers; partnership would strengthen local supply chain ahead of Indiana fab launch

A rendering of SK hynix's advanced packaging production facility for AI memory chips, under construction in West Lafayette, Indiana. [SK hynix]
A rendering of SK hynix's advanced packaging production facility for AI memory chips, under construction in West Lafayette, Indiana. [SK hynix]

SK hynix is considering entrusting Intel with the production of base die chips — the data pathway and control hub of high-bandwidth memory — as the South Korean chipmaker looks to diversify its foundry partnerships beyond Taiwan's TSMC. The move gained momentum after Intel hired former SK hynix CEO Lee Seok-hee as a senior vice president for its foundry business in June, analysts say, deepening ties between the two companies.

TSMC, the world's largest contract chipmaker, is facing production bottlenecks as demand for AI accelerators and high-performance computing chips surges. SK hynix is said to be eyeing Intel Foundry as a second vendor to speed up production and reduce cost pressures, with longer-term ambitions for packaging collaboration as well.

The potential partnership would also reinforce SK hynix's US localization strategy, dovetailing with the advanced packaging fab the company is building in Indiana. Intel operates fabs in Arizona and Ohio as the core sites for its leading-edge foundry processes.

According to industry sources, SK hynix is considering having Intel produce base die chips starting as early as HBM4E, the seventh-generation HBM.

As HBM technology advances, the base die's role in overall chip performance becomes increasingly critical. Beginning with HBM4, the sixth generation, SK hynix is using TSMC's cutting-edge ultra-fine processes to manufacture customized HBM products.

Relying on a single vendor, however, limits pricing leverage. Industry sources say discussions are underway about using TSMC's 3-nanometer-class leading-edge process for the HBM4E base die to boost performance — but TSMC plans to raise prices on advanced nodes below 7 nanometers, as well as on some 12-, 16- and 28-nanometer processes, by around 5 to 10 percent starting in 2027.

TSMC's capacity constraints are another factor pushing SK hynix toward a multi-vendor approach. With AI and HPC demand keeping the foundry in effect at full capacity, analysts warn that securing additional production volume could become increasingly difficult.

For Intel, SK hynix would be a powerful ally in turning around its foundry business. Intel is banking on its 18A process — a 1.8-nanometer-class leading-edge node — to pull its foundry division out of the red, and landing a major external customer is urgent. In the second quarter, external customers accounted for just 5 percent, or $293 million, of Intel Foundry's $5.8 billion in sales.

To stabilize its processes, Intel in June appointed Lee, the former SK hynix CEO, as senior vice president of Intel Foundry. Lee, who previously worked at Intel before leading SK hynix, returns to the company to oversee advanced packaging and back-end processes.

Intel CEO Lip-Bu Tan has repeatedly emphasized the significance of Lee's appointment. On the second-quarter earnings call last month, Tan said the company had brought on "Lee Seok-hee, who was most recently CEO of SK hynix," adding that Intel is "exploring multiple approaches to integrating compute and memory, including stacking technologies and ways to improve memory utilization and efficiency."

The Intel Foundry tie-up could also accelerate SK hynix's push to build an AI supply chain in the United States. SK hynix held a groundbreaking ceremony Thursday (local time) for its advanced packaging fab in Indiana, marking a major step toward establishing a domestic AI memory production base. The company plans to begin mass production of next-generation HBM at the facility in the second half of 2029.

At the ceremony, SK hynix CEO Kwak Noh-jung laid out a vision for seamlessly linking HBM production across South Korea and the United States. "In 2030, advanced HBM wafers produced in Korea will be shipped here to Indiana, where they will undergo advanced packaging and testing before being delivered to customers," Kwak said. "A fully integrated production system connecting Korea and the United States will be operating right here."


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