SK Hynix in talks with Intel to make memory chips in the US for the first time

SK Hynix ↗ 5.00% is in discussions with Intel ↗ 8.57% about a deal that would see the South Korean chipmaker produce memory semiconductors on American soil for the first time, Reuters reported Wednesday, citing three people familiar with the talks. Shares of both companies jumped in premarket trading, with Intel rising about 5% and SK Hynix's Nasdaq-listed shares climbing 3%.reuters+1

The discussions, described as exploratory, center on Intel's long-delayed Ohio manufacturing campus, where one scenario would have SK Hynix lease part of the facility. A second option under consideration involves forming a joint venture with Intel and major cloud companies seeking to secure memory chip supplies.cnbc+2

A Potential Lifeline for Intel's Ohio Campus

Intel announced the Ohio complex in 2022, pledging up to $100 billion to build what could become one of the world's largest chipmaking sites, with production initially targeted for 2025. After repeated setbacks, the first fab is now expected to be completed in 2030 and begin operating in 2030 or 2031. A lease or joint venture arrangement could put part of the idle campus to work and ease financial pressure on Intel, whose CEO Lip-Bu Tan has pledged "no more blank checks". The U.S. government owns roughly 10% of Intel after converting $8.9 billion of unpaid CHIPS Act grants into equity last year.finance.yahoo+1

SK Group Chairman Chey Tae-won said in July that customers and governments were pressing the company to expand supply. "I think we need to build a factory in the United States," Chey said. "If possible, I believe we should build it".reuters

Seoul and Washington Pull in Opposite Directions

Any agreement involving advanced memory technologies such as high-bandwidth memory or DRAM could face scrutiny from South Korea's government, which classifies those as sensitive under the Industrial Technology Protection Act. South Korea's trade ministry told Reuters that a U.S. investment would generally be at the company's discretion but could trigger a formal review if national core technology is involved.asiae+1

SK Hynix is caught between competing pressures. U.S. Commerce Secretary Howard Lutnick has threatened tariffs of up to 100% on South Korean and Taiwanese chipmakers that do not increase American production. Meanwhile, Seoul is urging SK Hynix and Samsung Electronics to accelerate plans for new memory fabs in South Korea's southwest as part of an 800 trillion won investment push.reuters+1

The talks also intersect with South Korea's broader $350 billion U.S. investment commitment made in exchange for a 15% tariff ceiling. About $150 billion has been earmarked for shipbuilding, but the remaining $200 billion remains unallocated, and Seoul is looking to use any SK Hynix commitment as leverage in those negotiations.reuters

SK Hynix said in a statement that it is "reviewing various measures, including establishing additional production bases, to strengthen the competitiveness of its memory business," but added that "no matters have been determined at this stage". Intel declined to comment on what it called speculation but said it was continuing investments in Ohio to ready the site.reuters