South Korean chipmaker SK Hynix broke ground on a $4 billion advanced packaging facility in Indiana on Thursday, marking a major expansion of US-based production for high-bandwidth memory chips that power artificial intelligence systems.
The facility, located at Purdue Research Park in West Lafayette, Indiana, will begin cleanroom operations in the second half of 2028, with volume production of next-generation HBM4E chips starting in the third quarter of 2029, Chief Executive Kwak Noh-Jung said at the groundbreaking ceremony.
The investment positions Indiana as a key hub for AI memory production in the United States. By 2030, the site is expected to reach annual capacity of hundreds of thousands of wafers, creating roughly 7,000 direct and indirect jobs in the region.
Memory Shortage Expected Through 2030
The expansion comes as the global AI industry faces a persistent bottleneck in high-bandwidth memory, the specialized chips that stack vertically to deliver the fast data processing needed for AI training and inference.
Chief executive Kwak warned that the current memory chip shortage is expected to persist through the end of 2030, driven by surging demand from hyperscalers, AI labs, and governments racing to build computing capacity. The warning underscored the urgency behind SK Hynix’s domestic expansion plans.
SK Hynix dominates the HBM market, holding approximately 58 percent of global revenue share in the first quarter of 2026, according to Counterpoint Research. Samsung Electronics and Micron Technology each held roughly 21 percent, leaving the industry heavily concentrated among three suppliers.
The facility will house a next-generation HBM packaging line as well as an AI semiconductor research and development center. The company aims to build a complete advanced memory supply chain in the United States, bringing production closer to its largest customers, including Nvidia, Microsoft, and Alphabet’s Google.
CHIPS Act Provides $958M in Government Support
The project has attracted significant federal backing under the US CHIPS Act. The US government finalized $458 million in grants and up to $500 million in loans in December 2024 to support the Indiana construction, reflecting Washington’s push to reshore semiconductor manufacturing and reduce dependence on East Asian supply chains.
The facility is a key component of SK Hynix’s broader global expansion. The company’s board recently approved approximately 54.3 trillion won ($38.3 billion) in investments through 2031, including 35.2 trillion won for the second phase of construction at its fabrication plants in South Korea.
In South Korea, SK Hynix is constructing the Yongin semiconductor cluster, where the first fab is targeted for completion by May 2027. Once fully operational, it will add roughly 350,000 wafers per month to the company’s production capacity.
AI Demand Reshapes Global Chip Landscape
HBM has emerged as the most strategically important product in the semiconductor industry. Unlike conventional memory, HBM chips are tightly integrated with AI processors, giving suppliers significant pricing power and creating high barriers to entry for new competitors.
The stakes are enormous. Nvidia, the largest buyer of HBM chips, projected on Wednesday a 70 percent jump in revenue for its next fiscal year, reaching approximately $108 billion in its current quarter alone. That forecast suggests AI infrastructure spending continues to accelerate despite growing concerns about costs and financing.
SK Hynix holds a technological lead in HBM production, having been first to mass-produce HBM4. Samsung Electronics, leveraging its larger DRAM production capacity, has been closing the gap. Market analysis suggests Samsung has surpassed SK Hynix in raw HBM production capacity, though SK Hynix maintains an edge in technology and market share.
Micron, the third major player, is building its first US memory lab to compete more aggressively in the HBM space. The race for memory dominance is expected to intensify as Nvidia’s next-generation Rubin architecture ramps up production in 2027.
“The HBM market has now entered round two, where stable supply capability has become the core competitive advantage beyond simple technology competition,” an industry official told Seoul Economic Daily.
For the broader AI industry, the Indiana facility and similar expansions represent a critical step toward stabilizing a supply chain that has constrained the pace of AI deployment. Until HBM4E production scales up significantly in 2029 and 2030, the memory shortage is expected to remain the primary bottleneck limiting how quickly the world can build AI computing capacity.
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