- SK Hynix ADRs rose over 3% on talks to make memory chips with Intel in the US
- Discussions may involve leasing part of Intel’s Ohio chipmaking facility
- Intel shares gained about 5% amid reports of a possible joint venture with cloud firms
SK Hynix American depositary receipts jumped more than 3% in pre-market trading on Wednesday after reports that the South Korean memory chipmaker is in exploratory talks with Intel to manufacture memory chips in the US for the first time.
The discussions could involve SK Hynix leasing part of Intel's planned chipmaking facility in Ohio, as per CNBC reports. Intel shares also gained about 5% following the report.
Another option under consideration is a joint venture involving Intel and major cloud companies looking to secure reliable memory supplies. No structure has been finalised, and the talks remain exploratory.
The potential partnership comes as demand for memory chips has surged on the rapid expansion of artificial intelligence and data centres. SK Hynix is a leading supplier of high-bandwidth memory (HBM) used in AI processors. It also produces DRAM and NAND flash memory.
Also Read | SK Hynix Explores Intel Deal For US Memory Chip Manufacturing: Report
For Intel, bringing SK Hynix into its Ohio manufacturing plans could provide a major customer for its foundry business and help ease pressure around the delayed project.
Intel had announced plans for a massive Ohio semiconductor complex, but production at its two planned plants has been pushed back to 2030 and 2031.
The talks could also support Washington's efforts to expand semiconductor manufacturing within the US. However, any agreement involving advanced memory technology could face scrutiny in South Korea.
Seoul considers certain semiconductor technologies sensitive, and production involving national core technology could require review under the Industrial Technology Protection Act.
SK Hynix said it is reviewing various options, including additional production bases, but nothing has been decided. Intel said it continues to invest in its Ohio site.
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The move would also come with higher costs. Semiconductor manufacturing in the US is more expensive because of higher labour and construction costs and the concentration of much of the supply chain in Asia.
SK Hynix has already been expanding its US footprint, including an advanced packaging facility under construction in Indiana. A deal with Intel could take that strategy further by adding front-end memory manufacturing in the country.
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