WEST LAFAYETTE, IND. — The U.S. Department of Commerce, which works with businesses and universities to promote job creation and economic growth, has agreed to a preliminary memorandum of terms (PMT) with semiconductor manufacturer SK hynix for its new $3.9 billion manufacturing plant in Indiana. The manufacturer, part of South Korean-based SK Group, announced in April that its advanced packaging and research-and-development (R&D) facility was coming to Purdue Research Park, an office and industrial research park adjacent to the campus of Purdue University in West Lafayette.

The PMT includes $450 million in direct funding under the CHIPS and Science Act and an additional loan of up to $500 million. The funding will contribute to SK hynix’s production of high-bandwidth-memory (HBM) semiconductors (or computer chips) for AI supply chain security technology in the United States.

These new-generation HBM chips will be mass-produced and packaged onsite and will have more processing power than SK hynix’s current chips, which process 1.18 terabytes of data per second.

“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 United States,” says Mung Chiang, president of Purdue University. “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.”

The announcement from the Department of Commerce also promises for SK hynix to create more than 1,000 new jobs in Indiana. The company plans to begin mass production at the West Lafayette facility in the second half of 2028.

The United States now has all five major semiconductor manufacturers in the world onshored, including SK hynix in West Lafayette, thanks in part due to the CHIPS Act. The Biden Administration signed the CHIPS Act into law in 2022 to “restore US leadership in semiconductor manufacturing.” According to The White House, the United States is on track to produce 20 percent of the world’s leading-edge semiconductors by 2030.

“With this incentive from the CHIPS and Science Act, SK hynix will make a major contribution to the complex computing systems that our nation relies on,” says Arati Prabhakar, assistant to the president for science and technology and director of the White House Office of Science and Technology Policy. “At the same time, we are making the R&D investments to win the future, too.”

The Purdue Research Foundation, which was established in 1930, manages Purdue Research Park. In addition to proximity to the university, the 725-acre park is also close to I-65, which can connect users with Indianapolis to the south and Chicago to the north. Existing tenants at the park include Cargill, C-SPAN, Indiana Department of Transportation, New York Life Insurance Co., Rolls Royce, the USDA and Vibronix, according to the property website.

— John Nelson