SK Hynix Starts More Than $4 Billion Project to Package AI Memory in Indiana
Key Facts
SK hynix held a groundbreaking ceremony for an AI memory packaging and testing facility in West Lafayette, Indiana, on August 27, 2026, local time, as part of a project with expected investment of more than $4 billion. The company said the site would be the first U.S. production base for high-bandwidth memory, adding a stage of the memory manufacturing chain on American soil. In its announcement, it said advanced chips made in South Korea would be transported to Indiana for packaging and testing. The core chips will therefore not be made at the U.S. facility; it will complete them before they are shipped to customers in the United States. The project comes as the company says demand for AI memory is supporting higher prices for its main products.
The facility’s cleanroom is scheduled to open by October 2028, with mass production of next-generation HBM set to begin in the second half of 2029, according to the timeline announced by SK hynix. The project will be carried out in stages, separating operational readiness from the start of commercial production, with the site dedicated to processing and testing chips after they are made in South Korea. The company said the facility would be a U.S. base for HBM, while the announced production path reflects the division of work between the two countries. When the project was first announced in 2024, Indiana presented it as an advanced packaging line targeting production of next-generation HBM. The memory is used in graphics processing units that train AI systems, according to the state’s economic development agency.
The project includes an advanced packaging research and development platform alongside the production lines, designed to work with customers, universities and commercial partners. SK hynix also signed a memorandum of understanding with Purdue University to collaborate on advanced packaging and system integration research, including HBM. The research partnership places the university near the manufacturing facility in West Lafayette, where the project combines production with technical development. Indiana Gov. Mike Braun said the groundbreaking marked “a step toward the future of American innovation, artificial intelligence and next-generation manufacturing.” Braun linked the state’s selection to the strength of its economy and talent, according to a statement from the Indiana Economic Development Corporation.
The company expects about 1,000 people to work at the facility during commercial operations, while its announcement estimated the project would support about 7,000 direct and indirect local jobs during construction and subsequent operations. The broader estimate includes jobs tied to the supply chain; SK hynix said more than 100 companies were being considered as project suppliers. The initial announcement in 2024 estimated investment of more than $3.87 billion to build a 430,000-square-foot facility on 90 acres at Purdue Research Park. The latest expected investment figure, exceeding $4 billion, reflects the company’s estimate for the project in its groundbreaking announcement. The company also said the facility is intended to support the stability of the U.S. semiconductor supply chain and strengthen national security and the economy.
The project is moving ahead as SK hynix expects demand to continue outstripping supply in the memory market through 2030, citing the difficulty of advanced manufacturing and the long time needed to build new facilities. In its quarterly results, the company said rising demand for AI memory and higher prices for key products helped it post record results. The company plans to increase HBM4 production and expects the product to surpass HBM3E in shipment volume and revenue during the fourth quarter of 2026, becoming its main product. The company’s shares, listed under the ticker SKHY, closed at $162.09 on October 29, 2026, compared with a close of $164.70 in the previous session, according to EL7 data. The price move puts the company’s expansion in memory in context, without changing the announced timetable for the cleanroom opening and production.