SK Hynix explores Intel deal to manufacture memory chips in the US

South Korea’s SK Hynix is exploring a potential U.S. manufacturing arrangement with Intel as AI and data-centre demand intensifies, while Washington presses chipmakers to expand domestic semiconductor production.

South Korea’s SK Hynix is exploring a potential arrangement with Intel to manufacture memory chips in the United States, according to reports. The proposal could mark the company’s first U.S. chipmaking operation as Washington pushes semiconductor firms to expand domestic production.

Under one option being considered, SK Hynix could lease a portion of Intel’s planned manufacturing campus in Ohio. Another possibility involves creating a joint venture with Intel and major cloud companies seeking more secure supplies of memory chips. The discussions remain preliminary, and no final decision has been taken.

SK Hynix weighs U.S. manufacturing options

The potential agreement could benefit both companies. For Intel, bringing a memory manufacturer into its Ohio project could strengthen the business case for the facility. For SK Hynix, U.S. production could improve its position with customers and policymakers amid strong demand for memory used in AI and data centres.

SK Hynix produces DRAM for servers, PCs and smartphones, as well as NAND flash for data storage. It is also a leading supplier of high-bandwidth memory (HBM) for AI systems. The memory types to be produced in Ohio have not been determined.

The company said it is considering additional production bases to strengthen its memory business, while stressing that nothing has been decided. Intel declined to comment but said it continues preparing its Ohio site.

Cost pressures and government scrutiny

Producing semiconductors in the United States is substantially more expensive than manufacturing them in South Korea, partly because of higher labour and construction costs and the concentration of suppliers across Asia. Nevertheless, SK Hynix faces increasing pressure from customers and governments to expand its U.S. footprint.

SK Group Chairman Chey Tae-won said in July that the company was under significant pressure to supply more chips and indicated that building a U.S. factory should be considered.

Intel announced in 2022 that it could invest as much as $100 billion in an Ohio semiconductor complex, initially targeting production in 2025. The timetable has since slipped, with the two planned plants now expected to be completed around 2030 and 2031.

Any move involving advanced memory technologies could also face scrutiny from Seoul. South Korea’s trade ministry said company decisions remain its responsibility, but projects involving nationally designated core technologies could require review under the Industrial Technology Protection Act.

The developments come amid stronger U.S. demands for semiconductor production on American soil. Commerce Secretary Howard Lutnick has threatened tariffs of up to 100% on South Korean and Taiwanese chip companies unless they increase domestic manufacturing.

Seoul, meanwhile, is encouraging SK Hynix and Samsung Electronics to accelerate investments in South Korea. Balancing these priorities could complicate the proposed partnership as U.S.-South Korea negotiations continue.