South Korea's SK Hynix is in exploratory talks with Intel to manufacture memory chips in the U.S. for the first time, potentially leasing space at Intel's delayed Ohio site or forming a joint venture with cloud providers. The negotiations come amid intense pressure from Washington, including threats of 100% tariffs from Commerce Secretary Howard Lutnick. However, any deal involving sensitive high-bandwidth memory could face strict regulatory opposition from the South Korean government under its Industrial Technology Protection Act.
SK Hynix-Intel manufacturing negotiations
- ▪SK Hynix stated that it is reviewing various measures to strengthen its memory business, including establishing additional production bases, but no agreements have been finalized.
- ▪Following reports of the negotiations on September 16, 2026, Intel shares rose over 5% and SK Hynix's Nasdaq-listed shares increased by approximately 3% in pre-market trading.
- ▪South Korean chipmaker SK Hynix is in exploratory talks with Intel to manufacture memory chips in the United States for the first time.
Ohio facility lease options
- ▪Intel's $100 billion Ohio chipmaking complex, originally scheduled to begin production in 2025, has had the completion of its first two plants delayed to 2030 and 2031.
- ▪An alternative structure under consideration is a joint venture between SK Hynix, Intel, and major cloud providers to secure a stable supply of memory chips.
- ▪One potential scenario under discussion involves SK Hynix leasing a portion of Intel's planned semiconductor manufacturing facility in Ohio.
Trump administration tariff pressure
- ▪The South Korean government is reportedly seeking to use SK Hynix's potential U.S. investments as leverage in broader trade negotiations with Washington over a $350 billion investment commitment.
- ▪SK Hynix is constructing a $4 billion advanced packaging facility in West Lafayette, Indiana, which is scheduled to package high-bandwidth memory chips by 2030 but will not manufacture foundational wafers.
- ▪U.S. Commerce Secretary Howard Lutnick has threatened South Korean and Taiwanese chipmakers with tariffs of up to 100% if they do not establish manufacturing operations in the United States.
AI-driven memory chip shortage
- ▪A rapid expansion of artificial intelligence and data centers has generated an acute global shortage of high-bandwidth memory chips, sharply driving up prices and profits for suppliers.
- ▪SK Hynix Chairman Chey Tae-won stated in July 2026 that the company faces immense pressure from customers and foreign governments to build factories and supply more chips in the United States.
South Korean technology export concerns
- ▪Manufacturing semiconductor wafers in the United States is significantly more expensive than in South Korea due to higher labor and construction costs, as well as an Asian-centric supply chain.
- ▪The South Korean Ministry of Trade stated that while the final investment decision lies with SK Hynix, any deal involving national core technology would be reviewed under the Industrial Technology Protection Act.
- ▪Any agreement to manufacture advanced memory technologies like high-bandwidth memory or DRAM in the United States could face opposition from the South Korean government, which classifies them as sensitive national core technologies.
Intel foundry business strategy
- ▪Securing SK Hynix as a customer would provide a major boost to Intel's struggling foundry business, which is a core pillar of CEO Lip-Bu Tan's turnaround strategy.
- ▪A partnership with SK Hynix would help Intel maximize capacity and validate its manufacturing model at its heavily-delayed Ohio site while easing some of the company's financial strain.
Debatable claims
- ▪South Korea should block SK Hynix from manufacturing advanced memory chips in the US
- ▪The US should impose tariffs on allied chipmakers that do not manufacture domestically
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