Shares of SK Hynix surged 4.1% to KRW 1,759,000 on September 16 after Reuters reported the South Korean chipmaker is in discussions with Intel to manufacture memory chips on American soil for the first time, a potential strategic pivot that investors are betting could reshape the company's cost structure, supply chain, and access to US government subsidies. SK Hynix Explores Making Memory Chips at Intel's Ohio Plant — But Can It Justify the Cost of Manufacturing in America?
Reports surfaced September 16 that SK Hynix, the world's dominant supplier of high-bandwidth memory chips used in AI systems, is in early talks with Intel to produce memory on U.S. soil for the first time. The stock jumped 4.1% to KRW 1,759,000 on elevated volume of roughly 2.86 million shares, snapping a four-session slide that had seen shares fall from KRW 1,856,000. The rally signals investor enthusiasm, but the fine print carries significant unknowns.
Two Deals Are on the Table, Neither Is Close to Done. Under one scenario, SK Hynix would lease part of Intel's chipmaking facility in Ohio.
Under another, Intel and SK Hynix could form a joint venture with major cloud firms. But the talks are exploratory, and no decisions have been made.
Intel has said the Ohio site's first factory won't finish construction until 2030, with operations starting between 2030 and 2031 — and the campus could eventually represent as much as $100 billion of investment. That timeline means any revenue impact for SK Hynix is years away, and today's pop is priced almost entirely on optionality — the possibility that a deal creates value, not certainty.
Making Chips in America Is Expensive, and Seoul May Push Back. Producing chips domestically is considerably more expensive than doing so in South Korea, with U.S. facilities facing steeper wages and building expenses on top of the added costs of operating far from Asia's dense semiconductor supply chain. There's also a political hurdle: any agreement involving advanced memory technologies could be subject to review under South Korea's Industrial Technology Protection Act. For shareholders, margin pressure and regulatory delays are real risks.
SK Hynix Is Already Deepening Its U.S. Footprint. This would complement the company's expansion in Indiana, where it recently broke ground on a high-bandwidth memory packaging plant after its historic $26.5 billion Nasdaq listing.
SK Hynix has already secured a combined $958 million in grants and loans under the CHIPS Act for that Indiana facility. A second U.S. site could unlock additional federal incentives while bringing production closer to hyperscale data-center customers like Amazon and Microsoft.
Intel Needs This Deal, Too. A deal would be a big win for Intel, which has been looking to gain marquee customers for its foundry business, a key pillar of CEO Lip-Bu Tan's strategy. That mutual need could accelerate negotiations — but also gives SK Hynix leverage on pricing and terms. Investors should watch for a formal memorandum of understanding; until then, today's gain remains a bet on a handshake.