SK Hynix (000660.KS) is in exploratory talks with Intel (INTC.O) to manufacture memory chips on U.S. soil for the first time, a move that could reshape North American semiconductor supply chains amid acute AI-driven memory shortages.
For investors tracking memory chip dynamics, a confirmed deal would mark a structural shift in where the world’s second-largest DRAM maker deploys capital – with significant implications for cost structures, tariff exposure, and competitive positioning against rivals including Micron Technology and Samsung Electronics (005930.KS).
Key Takeaways
- SK Hynix may lease capacity inside Intel’s delayed Ohio fab complex.
- A joint venture with Intel and major cloud firms is also under discussion.
- South Korean government approval poses a significant regulatory hurdle.
Market Context & Competitive Positioning
The talks arrive as the global memory sector navigates an AI-fuelled demand surge that has tightened supply across DRAM, NAND flash, and high-bandwidth memory (HBM) – the last of which SK Hynix dominates as the leading supplier to AI accelerator manufacturers. 1 Samsung and Micron are also racing to expand HBM capacity, intensifying the strategic premium on securing domestic U.S. production ahead of potential tariff escalation.
U.S. Commerce Secretary Howard Lutnick has threatened tariffs of up to 100% on South Korean and Taiwanese chipmakers unless they commit to expanding American production, according to Reuters. That external pressure materially changes the return calculus for any Korean memory investment on U.S. soil, despite significantly higher labour and construction costs compared with South Korean operations.
Structure of the Proposed Deal
Three people familiar with the discussions told Reuters that two deal structures are under consideration. 1 The first would see SK Hynix lease part of Intel’s planned chipmaking complex in New Albany, Ohio – a site announced in 2022 with a headline investment of up to $100 billion but whose two fabrication plants have since been delayed to 2030 and 2031.
The second structure involves a broader joint venture that would bring in major cloud companies eager to lock in memory chip supply, two of the sources said. The specific chip types SK Hynix would manufacture in Ohio – whether commodity DRAM, NAND flash, or strategically sensitive HBM – have not been determined, Reuters reported.
One source described the discussions as exploratory, stressing that no decisions have been made and that SK Hynix might pursue other deal structures entirely. SK Hynix currently has only a chip-packaging facility under construction in Indiana, making any Ohio fab agreement a material step-up in its U.S. manufacturing footprint.
The Seoul Problem
Perhaps the most consequential obstacle is geopolitical rather than financial. South Korea’s trade ministry said any decision remains at the company’s discretion, but warned that technologies classified as “national core technology” would be subject to review under the Industrial Technology Protection Act. 1 Advanced memory products such as HBM and leading-edge DRAM could fall under that designation, according to the three sources.
Seoul has simultaneously been urging SK Hynix and Samsung to accelerate domestic cluster development in South Korea’s southwest, creating a direct tension with Washington’s onshoring push. Two sources said the South Korean government is actively seeking to use any U.S. investment commitment from SK Hynix as leverage in its broader tariff and trade negotiations with Washington – effectively turning the company into a diplomatic bargaining chip. South Korea has earmarked $150 billion of a proposed $350 billion U.S. investment commitment toward shipbuilding, leaving $200 billion undecided.
Outlook & Management Commentary
SK Group Chairman Chey Tae-won signalled the company’s direction publicly in July, telling reporters:
“I think we need to build a factory in the United States. If possible, I believe we should build it.”
SK Hynix said in a statement that it is “reviewing various measures, including establishing additional production bases, to strengthen the competitiveness of its memory business,” but that “no matters have been determined at this stage.” 1 Intel declined to comment on what it called speculation, though it confirmed continued investment in Ohio to ready the site.
A deal would simultaneously relieve financial pressure on Intel – which is partly owned by the U.S. government following its restructuring – and deliver a high-profile domestic semiconductor win for the Trump administration. Hyperscaler investment in AI infrastructure has been a key driver behind memory demand tightness, and cloud firms’ reported interest in joining a potential venture underscores how deeply data centre operators want to control supply.
Conclusion
The talks are early-stage and face a dual-government approval problem that could stall or restructure any agreement. However, the strategic logic – tariff avoidance, supply-chain resilience, and proximity to AI data centre customers – is compelling enough that multiple deal architectures are already on the table. Investors in SK Hynix, Intel, and memory-adjacent names should watch for any South Korean government signal on technology export thresholds as the clearest near-term indicator of whether a deal can advance.
Not investment advice. For informational purposes only.
References
1Yang, H., Jin, H., Alper, A. & Nellis, S. (2026, September 16). “SK Hynix in talks with Intel about deal to make memory chips in the US for the first time, sources say”. Reuters. Retrieved September 16, 2026.