SK Hynix mulling making chips in US
SK Hynix is in talks with Intel to manufacture memory chips in the US, a first for the South Korean firm. One scenario involves leasing space at Intel's Ohio facility. Another considers a joint venture with Intel and cloud firms. Such a deal would aid Intel and align with US pressure for domestic chip production. However, South Korea's government could oppose the deal due to technology sensitivity.
SK Hynix's potential US manufacturing deal is less about Intel's facility and more about Washington's influence. The US administration is pushing chipmakers to build domestically. This reflects ongoing pressure on Asian suppliers to diversify production outside Asia. SK Hynix chairman Chey Tae-won already stated strong customer and country lobbying for US production.
The real test for SK Hynix is Seoul's reaction. South Korea considers advanced memory technologies, like HBM and DRAM, as national core technologies. Any deal involving these would trigger a review under the Industrial Technology Protection Act. This could complicate SK Hynix's plans and set a precedent for other Korean chipmakers.
The cost discrepancy is significant. Manufacturing semiconductors in the US is more expensive than in South Korea, due to higher labor and construction costs. Asia also hosts most of the semiconductor supply chain. This means SK Hynix would absorb higher operational expenses to satisfy US demand and political pressure.
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