US Department of Commerce finalizes $458 million grant for SK Hynix to build Indiana packaging plant — plans to lend an additional $500 million for Lafayette project

The U.S. Department of Commerce said it awarded SK Hynix $458 million in direct funding for its West Lafayette, Indiana, project to build a $3.87-billion packaging plant and R&D facility. The agency says this site is intended for artificial intelligence products and will fill “a critical gap in the U.S. semiconductor supply chain.” Aside from that, it will also offer up to $500 million in loans to the company—all of which are coming from the funding provided by the CHIPS Act.

When completed, this project will allow HBM chips to be manufactured within the United States, which is crucial for making AI chips. With TSMC already operating as an Arizona fab (and getting better yields than comparable facilities in Taiwan), the U.S. could build most of the components of its most advanced chips within its borders. In addition, it’s expected to create a thousand new jobs in the State of Indiana and even push research and development forward with its partnership with nearby Purdue University.

“By investing in companies like SK hynix and communities like West Lafayette, the bipartisan CHIPS and Science Act continues to supercharge America’s global technology leadership,” says Commerce Secretary Gina Raimondo.

“With this investment in SK hynix – the world’s leading producer of high-bandwidth memory chips – and their partnership with Purdue University, we are solidifying America’s AI hardware supply chain in a way no other country on Earth can match, creating hundreds of jobs in Indiana, and ensuring the Hoosier State plays an important role in advancing U.S. economic and national security,” stated Raimondo.

Many companies are racing to get funding from the CHIPS Act as Biden prepares to leave the White House. While there has been no official pronouncement yet on the fate of this massive investment in American semiconductor manufacturing, there have been rumors that Trump wants to end this program.

On the other hand, some experts say that Trump will likely continue the program and even relax some of the more progressive requirements that the Democrats have included in the law. Whatever the case, many companies want to secure their grants as early as possible to avoid any uncertainties. As for the future of this federal investment program, we’ll have to wait and see what President Trump does after January 20.