Korean semiconductor manufacturer SK hynix announced its intention to start mass production of its next-gen HBM4E chips at its Indiana plant in the third quarter of 2029, while its CEO stated that the current memory chip shortage is anticipated to continue until the end of 2030.
CEO Kwak Noh-Jung anticipates that the facility will ultimately achieve an annual output of hundreds of thousands of wafers.
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The project, exceeding $4 billion, represents a significant growth of SK hynix's operations in the US, driven by increased investment in artificial intelligence that boosts the need for high-bandwidth memory, or HBM.
The semiconductor manufacturer aims to position production nearer to key clients such as Nvidia, Microsoft, and Alphabet's Google. Kwak mentioned that he detected no evident indications of a memory decline and anticipated that any impending slowdown would entail a gradual rather than a steep drop in demand, noting that he was not worried about the forecast beyond 2030.
The company anticipates that Indiana will emerge as a major HBM manufacturing hub in the US by 2030. Kwak stated that the facility located in the Purdue Research Park in West Lafayette is expected to start cleanroom operations in late 2028.
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A cleanroom is a meticulously regulated production area that prevents dust and other tiny pollutants from entering during the chip fabrication process. The location will contain a cutting-edge HBM packaging line, along with an AI semiconductor R&D facility. Kwak mentioned that SK hynix plans to establish a sophisticated memory supply chain in the US.
HBM is a specialized memory chip that arranges chips in a vertical stack to provide quicker data processing while using less energy, which makes it ideal for the significant computing requirements of AI applications.
In contrast to traditional memory products, HBM chips are closely linked with AI processors, establishing increased technological entry barriers and providing suppliers with enhanced pricing authority. The product has become a significant growth engine for memory chip manufacturers following the recent decline in the industry.
In the first quarter of 2026, SK hynix represented 58 percent of the global HBM market by revenue, as reported by Counterpoint Research, significantly surpassing Samsung Electronics and Micron Technology, both of which had a 21 percent share.
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Nvidia, a significant client of SK hynix, projected on Wednesday a 70 percent increase in revenue for the upcoming fiscal year, highlighting persistent demand for AI computing and comforting investors regarding the sustainability of the AI spending surge, while Kwak's remarks imply SK hynix perceives minimal signs of an imminent turnaround in the memory cycle.
SK hynix anticipates that the facility and associated supply-chain investments will generate approximately 7,000 direct and indirect jobs in the area and enhance the resilience of the semiconductor supply chain.
To assist the company, the US government completed $458 million in grants and up to $500 million in loans through the CHIPS Act in December 2024. Independently, SK hynix's board sanctioned approximately 54.3 trillion won ($38.30 billion) in investments this month through 2031, which includes 35.2 trillion won designated for the second phase of building its chip manufacturing facilities in South Korea.