SK Hynix to start construction of new chip packaging plant in US early next year – sources

WASHINGTON (Reuters) – South Korea’s SK Hynix aims to select a U.S. site for its advanced chip packaging plant and innovate there around the first quarter of next year, two people familiar with the matter said, helping states to compete as China pumps money into the booming sector.

The factory, estimated to cost “several billions”, would go into mass production by 2025-2026 and employ around 1,000 workers, one of the sources said, declining to be named as details surrounding the plant have not been made public. .

It would likely be located near a university with engineering talent, the person added.

South Korea’s second-largest conglomerate SK Group, which owns leading memory chipmaker SK Hynix, announced the new factory last month as part of a $22 billion investment package. Americans in semiconductor, green energy and bioscience projects. The announcement, announced by the White House, allocates $15 billion to the semiconductor industry through research and development programs, materials and the creation of an advanced packaging and testing facility.

“R&D investments will include building a nationwide network of R&D partnerships and facilities,” the sources said, adding that the advanced packaging facility would package SK Hynix’s own memory chips with logic chips designed by other US companies for machine learning and artificial intelligence applications.

In a statement to Reuters, SK Hynix did not specifically address new details about the plant, but said of the recently announced investment, “$15 billion will be invested in advanced packaging and other related R&D to semiconductors, the details of which have not been decided yet.”

The United States has long handed over most basic, low-value chip packaging operations to overseas factories, mostly in Asia, where chips are placed in protective frames that are then tested before being shipped. electronics manufacturers.

But new battle lines are being drawn in the race to develop advanced packaging techniques, which involve placing different chips with different functions in a single package, improving overall capabilities and limiting the additional cost of more advanced chips.

“While the United States and its partners have advanced packaging capabilities, China’s massive investments in

packaging threatens to disrupt the market in the future,” the White House said in a 2021 report.

An executive at major Chinese chipmaker SMIC, which was added to a US trade blacklist in 2020, said last year that Chinese firms should focus on advanced packaging to overcome weaknesses in chip development more sophisticated, the report adds.

SK’s move comes after Biden signed into law the CHIPS Act this week, providing $52 billion in subsidies for chip manufacturing and research, as well as an estimated $24 billion investment tax credit. for chip factories. The sources said the R&D facilities and chip packaging plant would be eligible for funding.

The announcements also come amid a flurry of expansion plans announced by U.S. chipmakers in recent years, from Taiwan Semiconductor Manufacturing Co. to Samsung and Intel.