South Korean semiconductor company SK Hynix will open a new chip manufacturing plant in the US state of Indiana.

The company will invest around $3.87bn towards the plant, which will specialise in AI products.

The site will be used for research and development (R&D) of AI chips as well as advanced packaging fabrication. SK Hynix stated that it hoped the plant would support the US domestic chip industry and create over 1,000 new jobs in the area.

The plant will mass produce high-bandwidth memory chips and dynamic random access memory chips, which are used in large language models like ChatGPT.

The plant is expected to begin production in 2028.

SK Hynix reportedly selected Indiana as a manufacturing site due to its existing R&D ecosystem, wide talent pool and support from local government.

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US Senator Todd Young has been an advocate for the plant, stating that SK Hynix will soon become a “household name” in the state.

“This incredible investment demonstrates their confidence in Hoosier workers, and I’m excited to welcome them to our state,” he said.

“The CHIPS and Science Act opened a door that Indiana has been able to sprint through, and companies like SK hynix are helping to build our high-tech future,” added Young.

The US passed its CHIPS and Science Act in August 2022 attempting to consolidate its semiconductor and chip manufacturing.

Global semiconductor manufacturing is currently dominated by countries in the Asia Pacific region, such as Japan and South Korea. In its 2023 executive briefing on AI, research and analysis company GlobalData found that Asia Pacific countries recorded a 2022 semiconductor revenue of $371bn.

In comparison, the US only achieved a revenue of $141bn in the same period, accounting for less than a quarter of global semiconductor revenues.