WASHINGTON, Aug 11 (Reuters) - South Korea's SK Hynix aims
to select a U.S. site for its advanced chip packaging plant and
break ground there around the first quarter of next year, two
people familiar with the matter said, helping the United States
to compete as China pours money into the burgeoning sector.
The plant, whose estimated cost would be "several billions,"
would ramp up to mass production by 2025-2026 and employ about
1,000 workers, one of the sources said, declining to be named
because details about the plant have not been made public.
It would likely be located near a university with
engineering talent, the person said.
The company is "hoping to make a selection of the site and
break ground somewhere around the first quarter of next year,"
one of the people said.
SK Group, South Korea's second-biggest conglomerate, owns
memory chipmaker SK Hynix and announced the new
plant last month as part of a $22 billion U.S.-based investment
package in semiconductors, green energy and bioscience projects.
The announcement, heralded by the White House, said $15
billion would be allocated to the semiconductor industry through
research and development programs, materials, and the creation
of an advanced packaging and testing facility.
"R&D investments will include building out a nationwide
network of R&D partnerships and facilities," the source said,
adding that the packaging facility would package SK Hynix's
memory chips with logic chips designed by other U.S. companies
for machine learning and artificial intelligence applications.
The company, following the Reuters story about the timing of
the groundbreaking, confirmed it plans to select a site for the
plant in the first half of next year but said no decision has
been made on when to begin construction.
The United States long ago ceded most basic, low value chip
packaging operations to overseas factories mostly in Asia, where
chips are placed into protective frames which are then tested
before being shipped to electronics manufacturers.
But fresh battle lines are being drawn in the race to
develop advanced packaging techniques, which involve placing
different chips with different functions into a single package,
enhancing overall capabilities and limiting the added cost of
more advanced chips.
"While the United States and its partners have advanced
packaging capabilities, China's massive investments in advanced
packaging threaten to upend the market in the future," the White
House said in a 2021 report.
An executive at China's top chipmaker SMIC, which
was added to a U.S. trade blacklist in 2020, said last year
Chinese companies should focus on advanced packaging to overcome
their weaknesses in developing more sophisticated chips,
according to the report.
SK Group's move comes after Biden signed into law the CHIPS
Act this week, providing $52 billion in subsidies for chip
manufacturing and research, as well as an estimated $24 billion
investment tax credit for chip plants. The sources said the R&D
facilities and the chip packaging plant would both qualify for
There has been a flurry of expansion plans announced by
chipmakers in the United States in recent years, from Taiwan
Semiconductor Manufacturing Co to Samsung Electronics
(Reporting by Alexandra Alper; Additional reporting by Karen
Freifeld; Editing by Chris Sanders, Alexandra Hudson and Tom