U.S. Department of Commerce announces $450M grant and $500M loan to SK hynix’s AI memory chip facility at Purdue Research Park

The preliminary memorandum of terms between the South Korean semiconductor manufacturer and the U.S. Department of Commerce will support high-bandwidth-memory AI chip production and advanced packaging R&D

WEST LAFAYETTE, Ind. — The U.S. Department of Commerce announced Tuesday (Aug. 6) that it has agreed to a preliminary memorandum of terms with SK hynix to provide up to $450 million in direct funding, and an additional loan of up to $500 million, to support high-bandwidth-memory (HBM) production and advanced packaging research and development for AI supply chain security in the U.S. The announcement also promises to create more than 800 new jobs in Indiana.

This comes on the heels of SK hynix’s April 2024 announcement that it plans to invest close to $4 billion to build an advanced packaging fabrication and R&D facility for AI products in the Purdue Research Park in West Lafayette. The new facility will be home to an advanced semiconductor packaging production line that will mass-produce next-generation HBM chips, the critical component of graphics processing units that train AI systems such as ChatGPT. The development of a critical link in the U.S. semiconductor supply chain next to Purdue’s campus marks another giant leap forward in the industry and the state. 

“We are excited about the Department of Commerce’s support, through the CHIPS and Science Act, of the largest semiconductor production facility located at a university in the U.S.,” Purdue President Mung Chiang said. “This facility will be transformational, as SK hynix leads globally in AI memory chips. And as the leading American university in this foundational technology, Purdue University is committed to co-creating jobs, workforce and innovation in our state and the Silicon Heartland.”

Featuring increased processing power, the next-generation chips will boast more advanced performance than the company’s latest HBM, which processes up to 1.18 terabytes of data — the equivalent of 230 full HD movies — per second.

“Today’s historic announcement with SK Hynix would further solidify America’s AI hardware supply chain in a way no other country on earth can match,” U.S. Secretary of Commerce Gina Raimondo said.

The HBM, which will be researched and developed, mass-produced, and packaged in this ecosystem with Purdue University, will play an important role in the U.S. semiconductor ecosystem and in advancing U.S. technological leadership.

“We are moving forward with the construction of the Indiana production base, working with the state of Indiana, Purdue University and our U.S. business partners to ultimately supply leading-edge AI memory products from West Lafayette,” SK hynix CEO Kwak Noh-Jung said.

The U.S. now has all five major semiconductor manufacturers in the world onshored, including SK hynix in West Lafayette.

Investment in the Midwest and Indiana was spurred by Purdue’s excellence in discovery and innovation and its track record of exceptional R&D and talent development through collaboration.

“Indiana is a global leader when it comes to innovating and producing the products that will power our future economy. Today’s announcement supporting the planned work of SK hynix in West Lafayette is further proof that Indiana is a key player on both the national and economic security stages,” Indiana Gov. Eric Holcomb said. “I’m proud our SK hynix partnership answers the call for industry growth in America for decades to come. Indiana’s academic and government assets are perfectly aligned with the semiconductor industry mission, and this major announcement today not only underscores our state’s role in the hard-tech sector but is also another reminder that Indiana is a safe place to bet on the future. I’m grateful to so many of our valued partners, like Purdue University, and especially Sen. Young, who’s been relentlessly effective in his pursuit of this investment.”

Managed by the Purdue Research Foundation, Purdue Research Park was chosen as SK hynix’s location as it unites discovery and delivery with easy access to Purdue faculty experts in the semiconductor field, highly sought-after graduates prepared to work in the industry, and vast Purdue research resources. The park, one of the largest university-affiliated high-tech business incubation complexes in the country, also offers convenient accessibility for workforce and semitruck traffic, with access to I-65 just minutes away.

Brian Edelman, Purdue Research Foundation president, said, “Semiconductors and microelectronics are at the forefront of focus for Purdue Research Foundation. I am pleased to foster an innovative ecosystem that high-tech companies moving into Indiana can trust to deliver excellence in all ways.”

Today’s news solidifies Indiana as a semiconductor industry leader and Purdue University as a valued partner for innovative high-tech companies like SK hynix and its supply chain partners.

About Purdue Research Foundation

Purdue Research Foundation is a private, nonprofit foundation created to advance the mission of Purdue University. Established in 1930, the foundation accepts gifts; administers trusts; funds scholarships and grants; acquires and sells property; protects and licenses Purdue’s intellectual property; and supports creating Purdue-connected startups on behalf of Purdue. The foundation operates Purdue Innovates which includes the Office of Technology Commercialization, Incubator and Ventures. The foundation manages the Purdue Research Park, Discovery Park District, Purdue Technology Centers and Purdue for Life Foundation. 

For more information on licensing a Purdue innovation, contact the Office of Technology Commercialization at otcip@prf.org. For more information about involvement and investment opportunities in startups based on a Purdue innovation, contact Purdue Innovates at purdueinnovates@prf.org. 

About Purdue University

Purdue University is a public research institution demonstrating excellence at scale. Ranked among top 10 public universities and with two colleges in the top four in the United States, Purdue discovers and disseminates knowledge with a quality and at a scale second to none. More than 105,000 students study at Purdue across modalities and locations, including nearly 50,000 in person on the West Lafayette campus. Committed to affordability and accessibility, Purdue’s main campus has frozen tuition 13 years in a row. See how Purdue never stops in the persistent pursuit of the next giant leap — including its first comprehensive urban campus in Indianapolis, the Mitch Daniels School of Business, Purdue Computes and the One Health initiative — at https://www.purdue.edu/president/strategic-initiatives.