Key facts
- SK Hynix is in talks with Intel to manufacture memory chips in the U.S. for the first time.
- The potential deal could involve SK Hynix leasing part of Intel's facility in Ohio.
- Seoul may oppose the production of advanced memory chips like HBM or DRAM due to their sensitive nature.
- Manufacturing semiconductors in the U.S. is significantly more expensive than in South Korea.
- Intel has a planned investment of up to $100 billion for a chipmaking complex in Ohio, with production delays.
- U.S. Commerce Secretary Howard Lutnick has threatened tariffs on South Korean and Taiwanese companies for not increasing U.S. production.
South Korea's SK Hynix is reportedly in discussions with Intel about a potential deal that would allow the memory chip manufacturer to produce chips on U.S. soil for the first time. Under consideration is SK Hynix leasing part of Intel's planned chipmaking facility in Ohio, or forming a joint venture with Intel and major cloud providers. Such an agreement could alleviate pressure on Intel and support the U.S. administration's push for domestic chip production amid a shortage driven by AI and data center investments.
However, the deal faces a significant hurdle: potential opposition from the South Korean government. Seoul views advanced memory technologies like High Bandwidth Memory (HBM) and DRAM as sensitive national core technologies, and their production abroad could trigger a review under the Industrial Technology Protection Act. SK Hynix confirmed it is "reviewing various measures, including establishing additional production bases, to strengthen the competitiveness of its memory business," but stated "no matters have been determined at this stage." Intel declined to comment on the speculation but affirmed its ongoing investment in the Ohio site.
Manufacturing semiconductors in the U.S. is considerably more expensive than in South Korea due to higher labor and construction costs, as well as the concentration of the supply chain in Asia. Despite these challenges, SK Hynix chairman Chey Tae-won has indicated a need to build a factory in the United States. The potential deal could also offer financial relief to Intel, which has faced delays in completing its $100 billion Ohio chipmaking complex, originally slated to begin production in 2025 but now delayed to 2030-2031. The U.S. has been pressuring South Korean and Taiwanese companies to increase production on American soil, with U.S. Commerce Secretary Howard Lutnick threatening up to 100% tariffs if they do not commit to greater U.S. manufacturing. This situation places SK Hynix in a difficult position, caught between pressure from Washington to expand in the U.S. and Seoul's desire to leverage any U.S. investment for its own strategic interests.