SK Hynix in Talks with Intel for Potential US Memory Chip Production, Sources Say

South Korea's SK Hynix Inc. is in discussions with Intel Corp. about a landmark deal to manufacture memory chips in the United States for the first time, according to three people familiar with the matter. The exploratory talks could provide a financial boost to Intel's delayed Ohio project and mark a significant development in U.S. efforts to domesticate the semiconductor supply chain.

Potential Deal Structures

The discussions are in an early stage and no final decisions have been made, one source stressed. According to the people familiar with the talks, two primary scenarios are being considered:

• SK Hynix could lease a portion of Intel's massive, long-planned chipmaking complex in Ohio.
• Alternatively, the company could form a joint venture with Intel and major cloud computing firms that are keen to secure a stable supply of advanced memory chips.

SK Hynix is a leading global supplier of DRAM, NAND flash, and the crucial High-Bandwidth Memory (HBM) used extensively in AI processors. However, the sources did not specify which types of chips would be produced under a potential agreement.

Strategic Implications for Chipmakers

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For SK Hynix, establishing a U.S. fabrication plant would address intense pressure from customers and the U.S. government to localize production, despite significantly higher labor and construction costs compared to its home base in Asia. "I think we need to build a factory in the United States. If possible, I believe we should build it," SK Group Chairman Chey Tae-won told reporters in July, as cited by Reuters.

For Intel, a partnership would help alleviate the financial strain of its ambitious Ohio project. The U.S. chipmaker announced in 2022 a plan to invest up to $100 billion in the site, but the completion of its first two plants has since been delayed from 2025 to 2030 and 2031.

Regulatory and Geopolitical Hurdles

A significant obstacle to any deal could be opposition from the South Korean government. The sources noted that any agreement to produce advanced technologies like HBM or DRAM abroad would likely face scrutiny, as Seoul considers them a "national core technology."

South Korea’s trade ministry confirmed that such a plan would be subject to a review under its Industrial Technology Protection Act. In an official statement to Reuters, SK Hynix said it is "reviewing various measures" to strengthen its business but that "no matters have been determined at this stage." Intel declined to comment on what it termed speculation.