[News] SK hynix Reportedly Explores Leasing Intel’s Ohio Fab, Could Produce Memory in U.S. for First Time

SK hynix may manufacture memory chips in the U.S. for the first time, potentially with an unexpected U.S. partner. According to Reuters, sources say SK hynix is in talks with Intel over a potential deal to manufacture memory chips in the U.S. Under one potential scenario, SK hynix could lease part of Intel’s long-planned chipmaking facility in Ohio. Another possibility could see it form a venture with Intel and major cloud firms seeking to secure memory chip supplies.

The talks remain exploratory and no decisions have been made, the report notes, adding that SK hynix could consider other ways to structure a potential deal. It is also unclear what types of memory chips the company might manufacture in Ohio if an agreement is reached.

Potential opposition from Seoul could present another hurdle. As the report indicates, any agreement involving advanced memory such as HBM or DRAM could face scrutiny from the South Korean government. South Korea’s trade ministry said any decision would be at the company’s discretion, but a deal involving a “national core technology” would be subject to review under the Industrial Technology Protection Act.

SK hynix told Reuters it is considering additional production bases, though no decisions have been made. Intel declined to comment but said it continues to prepare its Ohio site.

What Could Drive an SK hynix-Intel Deal

Semiconductor manufacturing remains considerably more expensive in the U.S. than in South Korea, with the Reuters report citing higher labor and construction costs and a supply chain still concentrated in Asia. Even so, SK hynix has reasons to expand its U.S. manufacturing footprint. The company listed its shares on Nasdaq in July and currently has only a chip packaging facility under construction in Indiana.

Pressure to expand supply provides another incentive. SK Group Chairman Chey Tae-won said in July that customers and governments are putting significant pressure on the company to increase chip supply. Notably, U.S. policy adds to that pressure, with Commerce Secretary Howard Lutnick threatening tariffs of up to 100% on South Korean and Taiwanese chipmakers that do not expand production in the country, the report notes.

Establishing production in Ohio could help address both concerns. If the cooperation materializes, SK hynix could build a more complete U.S. supply chain spanning wafer production and packaging, Seoul Economy News highlights. Producing chips closer to customers could also reduce supply chain risks while helping the company respond to U.S. requirements for local production.

The potential deal could also benefit Intel by easing some of the financial pressure surrounding its Ohio expansion. As Reuters adds, Intel announced plans in 2022 to invest up to US$100 billion to build what could become the world’s largest chipmaking complex in Ohio, with production initially scheduled to begin in 2025. Completion of the site’s two fabs has since been pushed back to 2030 and 2031.

The two companies also have an established relationship. As News1 notes, SK hynix agreed to acquire Intel’s NAND business in 2020, began taking over the operations in stages in 2021, and completed the acquisition last year.

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(Photo credit: SK hynix)