Memory chip giant SK Hynix to set up chip packaging plant in India

INDIA – South Korean chip manufacturer SK Hynix is exploring prospects of setting up a packaging facility in India, reports The Indian Express (IE).

The company is primarily involved in the manufacturing of memory chips which includes computing memory, consumer and network memory, and graphics memory.

SK Hynix is evaluating India from an assembly and testing destination standpoint, the report said.

Citing a senior government official aware of the development, the newspaper reported: “SK Hynix has shown interest in our scheme and is currently evaluating it to assess it from their business’s perspective.

“We believe they are in the final stages of submitting a proposal to set up a packaging plant, similar to that of Micron’s.”

The development follows Micron’s decision to set up a packaging facility in Gujarat at a total cost of US$2.75 billion, of which 70 percent will come in subsidies from the Central and state government, with the company expected to invest US$825 million from its pocket.

Samsung and SK Hynix dominate global sales of dynamic random-access memory chips, with data from research agency TrendForce showing they held market shares of 41 percent and 29 percent respectively, in the final quarter of 2022, followed by Micron at around 26 percent.

The Centre’s incentive scheme for the semiconductor, worth a total outlay of US$10 billion, offers capital subsidies to the tune of 50 percent of the total project cost for setting up assembly and testing plants.

While such plants are not the most sophisticated part of the ecosystem, they are an important component.

Though SK Hynix is yet to officially submit its proposal, managing to convince the company in setting up a packaging plant in the country will come as a big boost to India’s chip-making plans as it looks to build out the overall ecosystem in the country, even as it waits for a marquee name to set up a fabrication plant.

Recently, India’s semiconductor ambitions were dealt a blow as Taiwanese contract manufacturer Foxconn said it was pulling out of a joint venture with Vedanta under which the two had planned to set up a chip and display fab for US$19.5 billion.

However, Foxconn is working towards applying to the scheme on its own, this paper reported earlier.

It is not just the Vedanta-Foxconn proposal — two other proposals for India’s US$10 billion chip incentive scheme too remain uncertain.

ISMC, backed by Abu Dhabi-based Next Orbit and Israel’s Tower Semiconductor, has asked the Centre not to consider its proposal owing to a pending merger between Intel and Tower Semiconductor. The merger was announced more than a year ago but has not moved ahead.

The consortium had initially said it would set up a US$3 billion semiconductor fab in Karnataka. But the proposal is not expected to move until Intel’s merger with Tower is complete.

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