Reuters reports SK hynix-Intel cooperation discussions

Intel may lease two Ohio factories to SK hynix

Industry watches for first-ever US DRAM production by SK hynix

Move seen as response to Washington's pressure for more memory investment

A semiconductor production facility Intel is building in New Albany, Ohio. The plant is targeted for operation in 2030-2031. [Intel]
A semiconductor production facility Intel is building in New Albany, Ohio. The plant is targeted for operation in 2030-2031. [Intel]

Reports that SK hynix is in talks with Intel to produce memory chips on US soil have renewed speculation about additional investment by the South Korean chipmaker in the United States.

The semiconductor industry is closely watching whether SK hynix will build additional memory production facilities in the country, following the groundbreaking last month on its first advanced packaging fab in the US for AI memory chips.

Reuters reported Thursday, citing multiple sources, that SK hynix is in negotiations with Intel to produce memory semiconductors in the United States, and that SK hynix may lease part of Intel's Ohio production facilities.

The report added that SK hynix is also discussing a plan to establish a joint venture with Intel and cloud companies through shared investment.

SK hynix said it is "reviewing various options to strengthen global competitiveness, but nothing has been finalized at this time," signaling that no decisions have been made regarding cooperation with Intel or memory production in the United States.

Nevertheless, as a prolonged memory supply shortage persists and the US administration continues to press for additional investment in memory production facilities, the prospect of a US factory is consistently raised. Should a deal with Intel materialize, SK hynix would produce DRAM in the United States for the first time in its history.

The Intel facilities cited as a potential production base are two foundry factories currently under construction in New Albany, Ohio. Originally targeted for operation in 2025, Intel slowed the project amid foundry losses and has pushed back the completion date to after 2030.

For Intel, completing the foundry factories without securing enough customers would mean massive losses. Leasing the facilities to SK hynix would ease the enormous upfront cost burden and give the company room to breathe.

For SK hynix, the arrangement is seen as one option for deflecting US administration pressure to invest further in memory production facilities on American soil.

US Commerce Secretary Howard Lutnick has repeatedly pressed SK hynix and Samsung Electronics to build memory semiconductor factories in the United States. Because the fab SK hynix is currently building in West Lafayette, Indiana, is a back-end packaging facility, the push is for SK hynix to also establish front-end memory production facilities in the US — operations that would generate comparatively greater benefits for local economies and job creation.

SK Group Chairman Chey Tae-won earlier fueled speculation about additional memory investment when he said in a CNBC interview in July, held to mark SK hynix's American depositary receipt listing, that the company is "reviewing additional investment beyond the advanced packaging facility in Indiana" and that "building a memory production factory is possible if conditions such as power, water, workforce and supply chain are in place."

The possibility of further US investment also came up at the groundbreaking ceremony for SK hynix's advanced packaging fab in Indiana on Aug. 27.

SK hynix President Kwak Noh-jung said on the occasion that "SK hynix will continue to expand investment and cooperation in the United States," adding that "our journey beginning today in Indiana will lead to a greater future for the US AI industry and for SK hynix."


joze@heraldcorp.com