SK Hynix and Intel in Talks to Manufacture Memory Chips in the US
SK Hynix is in early talks with Intel to manufacture memory chips in the US, potentially leasing an Ohio facility or forming a joint venture to meet soaring AI demand.
SK Hynix is in talks with Intel to manufacture its memory chips in the United States, a move that could mark the first time the South Korean semiconductor giant produces its memory products domestically.
According to a Reuters report on the negotiations, shares of both companies rose in pre-market trading: Intel's stock climbed by approximately 5%, while SK Hynix traded up about 3% on Nasdaq.
Potential Deal Structures
Under one of the scenarios being evaluated, SK Hynix would lease a portion of Intel's chip manufacturing facility in Ohio. Another option under consideration involves establishing a joint venture between the two companies, alongside major cloud providers. According to Reuters, SK Hynix may also explore other deal structures. The talks are at an early stage, and no final decisions have been made, according to one of the sources. Both companies did not immediately respond to CNBC's request for comment.
Strategic Importance for Intel
For Intel, such a deal could be particularly significant. In recent years, the company has been trying to attract major clients to its foundry business, which has become one of the pillars of the strategy led by CEO Lip-Bu Tan. Securing a customer of SK Hynix's scale could provide a major boost to Intel's manufacturing operations, which are at the center of efforts to restore the company to a central position in the semiconductor industry.
The deal could also serve US government policies aimed at encouraging semiconductor manufacturing within the United States and reducing reliance on Asian production.
Surging Demand for AI Chips
SK Hynix itself is experiencing a period of unprecedented demand for memory chips, driven by massive investments in AI infrastructure and data centers. The race to build data centers has created a shortage of memory chips and led to a sharp increase in prices, alongside a surge in profits for SK Hynix and its competitor Samsung.
SK Hynix, which issued ADRs trading on Nasdaq in July, is also benefiting from a sharp rise in its stock. The company's shares traded in South Korea have surged by approximately 400% over the past 12 months, against the backdrop of the boom in demand for memory chips designed for the AI era.
