Introduction
SK hynix Inc. has announced the signing of a non-binding preliminary memorandum of terms with the U.S. Department of Commerce. This agreement will enable the company to receive up to $450 million in proposed direct funding, along with access to proposed loans of $500 million. The funding is part of the CHIPS and Science Act and aims to support SK hynix’s investment in building a production base for semiconductor packaging in Indiana.
Details of the Agreement
The memorandum of terms outlines the financial support SK hynix will receive from the U.S. Department of Commerce, which totals up to $950 million. This financial support is crucial as SK hynix embarks on an extensive project to enhance semiconductor packaging capabilities. The initiative is part of a broader strategy to strengthen the U.S. semiconductor supply chain.
Tax Benefits
In addition to the direct funding and loans, SK hynix plans to seek further assistance from the U.S. Department of the Treasury. The company intends to apply for a tax benefit equivalent to up to 25% of the qualified capital expenditures via the Investment Tax Credit program. This tax incentive will significantly reduce SK hynix’s financial burden in establishing the new production facility.
Conclusion
SK hynix Inc.’s investment in Indiana is set to receive substantial support from both the U.S. Department of Commerce and the U.S. Department of the Treasury. The combination of proposed direct funding, loans, and tax benefits underscores the importance of this project within the context of the CHIPS and Science Act. As SK hynix continues its expansion, this collaboration will serve as a notable development in fortifying the semiconductor industry in the United States.
