SK Hynix in talks with Intel to manufacture memory chips in the US

What is being proposed?

South Korean chipmaker SK Hynix is in preliminary talks with Intel to manufacture memory chips in the United States, a move that would mark the company's first chip-fabrication venture on American soil.

The discussions, first reported by Reuters, are exploratory and no final decisions have been made. Under one of the plans being considered, SK Hynix would lease space at Intel's planned manufacturing facility in Ohio. Another option involves forming a joint venture that would include major cloud computing companies.

In a statement, SK Hynix confirmed it is looking at ways to expand but stressed that nothing is locked in. "SK Hynix is exploring various options to strengthen its global competitiveness, but no specific plans or arrangements have been finalized at this time," the company said, adding that "no decisions have been made" regarding the specific Ohio lease or joint venture scenarios.

Intel did not immediately respond to requests for comment.

Why it matters to Intel and the US

If the two firms reach an agreement, it would represent a major victory for Intel. The US semiconductor giant has been trying to secure high-profile clients for its manufacturing arm, known as its foundry business, under a strategy championed by chief executive Lip-Bu Tan. It would also align with Washington's broader efforts to bring critical semiconductor manufacturing back to the US.

SK Hynix is a critical player in the artificial intelligence boom. It is one of the world's leading suppliers of high-bandwidth memory (HBM), the ultra-fast chips that power Nvidia's dominant AI processors. The massive demand for data centres has created a global shortage of these chips, driving up prices and pushing SK Hynix's South Korea-listed shares up 400 per cent over the past year.

Potential hurdles

However, any deal to manufacture advanced memory chips in the US could face regulatory hurdles at home. Although Seoul has stated the choice ultimately rests with the company, sources told Reuters that the South Korean government could review the deal. Under South Korean law, technologies deemed strategically important are heavily protected to prevent them from being transferred overseas.

SK Hynix is already expanding its footprint in America. The company recently broke ground on an advanced packaging and research plant in West Lafayette, Indiana. SK Hynix has previously estimated the project will cost around $4 billion and is designed to package South Korean-made DRAM wafers into finished HBM chips, with mass production scheduled to start by 2030. TechCrunch reported the facility's cost at $3.8 billion with a 2029 target.

The two companies already have a history of major transactions. In 2020, Intel agreed to sell its NAND flash-memory business to SK Hynix in a deal valued at $9 billion.