SK Hynix and Intel Shares Rise Following Report of US Memory Chip Manufacturing Talks

Shares in SK Hynix (NASDAQ:SKHY) and Intel (NASDAQ:INTC) rose on Wednesday following a report that the two companies were discussing a potential agreement to manufacture memory chips in the United States.

Reuters reported, citing three people familiar with the discussions, that the proposed arrangement could establish SK Hynix’s first US memory chip production operation.

One option under consideration would involve SK Hynix leasing part of Intel’s planned semiconductor manufacturing facility in Ohio. Another possibility is a joint venture involving the two chipmakers and major cloud computing companies seeking to secure memory supplies.

The discussions remain preliminary, and no agreement has been reached.

“While the company is reviewing various measures, including establishing additional production bases, to strengthen the competitiveness of its memory business, no matters have been determined at this stage,” an SK Hynix spokesperson told Investing.com.

Intel did not immediately respond to a request for comment.

Shares Advance in South Korea and US Premarket Trading

SK Hynix shares gained 2.7% to 1,735,000 won in South Korean trading, compared with a 1% increase in the broader KOSPI index.

At 08:14 GMT, the company’s US-listed shares were up 2.9% in premarket trading, while Intel shares had risen approximately 5%.

The companies have not determined which types of memory chips could be manufactured at the Ohio facility, according to Reuters.

SK Hynix produces DRAM and NAND flash memory and is a major supplier of high-bandwidth memory (HBM), which is used in artificial intelligence processors.

Potential Production Plans Could Face South Korean Regulatory Review

Any proposal to manufacture advanced memory products, including HBM or DRAM, in the United States could face regulatory scrutiny in South Korea because the technologies are considered sensitive, according to the sources cited by Reuters.

South Korea’s trade ministry said the decision would rest with SK Hynix, although projects involving nationally important technologies could be reviewed under the country’s Industrial Technology Protection Act.

The potential regulatory requirements add another consideration to the proposed manufacturing arrangement, alongside the commercial and operational terms that remain unresolved.

AI Demand Drives Interest in Additional Manufacturing Capacity

The discussions come amid increased demand for memory chips used in artificial intelligence systems and data centres.

The United States has been encouraging semiconductor manufacturers to expand domestic production, while SK Hynix faces requests from customers and governments to increase its US manufacturing presence.

Manufacturing costs in the United States are significantly higher than in South Korea, creating an additional consideration for any proposed investment.

SK Hynix recently completed a secondary listing on Nasdaq and is constructing a semiconductor packaging facility in Indiana.

In July, Chairman Chey Tae-won said the company needed to establish a US factory if possible.

Intel’s Ohio Project Remains Under Development

Intel has committed to developing its semiconductor manufacturing site in Ohio, although construction delays have pushed the planned commencement of production to 2030 and 2031.

A potential arrangement with SK Hynix could provide an additional use for the facility and help reduce some of Intel’s financial burden associated with the project, Reuters reported.

However, the companies have not announced a transaction, confirmed a production plan or specified a timetable for any potential partnership.

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