Intel and SK Hynix Stocks Rise on U.S. Production Talks

Intel and SK Hynix stock prices rose on July 16 amid reports that SK Hynix is discussing with Intel plans to produce memory semiconductors in the U.S. for the first time. According to blockchain media Cryptopolitan, Intel shares climbed 5.2% before the market opened, while SK Hynix closed up 4.1% on the Seoul Stock Exchange. Nasdaq-listed shares also rose about 3% ahead of trading.

The core of the discussions revolves around whether SK Hynix will establish a new production base in the U.S., with options including utilizing part of Intel's Ohio facility or forming a joint venture with Intel, SK Hynix, and major cloud companies. However, the talks are still at an early stage, with no agreements reached yet. SK Hynix is also considering other production methods.

The specific products to be manufactured in Ohio remain undecided. SK Hynix produces DRAM and NAND flash memory, and is the largest supplier of HBM (high-bandwidth memory) used in AI processors. However, if HBM or DRAM are included, there could be potential government intervention from South Korea under national core technology regulations. The Ministry of Trade, Industry and Energy stated that while companies can make autonomous investment decisions, investments involving national core technologies require review under the Industrial Technology Protection Act.

SK Hynix said it is reviewing various options to strengthen its memory business competitiveness, including establishing additional production facilities, but no decisions have been finalized. Intel referred to the reports as speculation but confirmed that the Ohio project continues to move forward.

The potential collaboration could ease Intel's investment burden in Ohio, where it previously planned to invest up to $100 billion by 2022, though the start of production was delayed from 2025 to 2030 and 2031 for two facilities. SK Hynix faces dual pressures: Chairman Choi Tae-won mentioned in July that customers and the government strongly urged supply expansion, highlighting the need for a U.S. factory, while South Korea's government is urging SK Hynix and Samsung Electronics to accelerate a new semiconductor cluster in southwestern Korea, and the U.S. is pushing for increased domestic production.