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SK Hynix (000660.KS), the world's second-largest memory chip maker, said it will invest around $3.87 billion (28 billion yuan) to build an advanced packaging plant and research and development facility for AI products in the U.S. state of Indiana.

The new plant will include an advanced chip production line to mass-produce next-generation high bandwidth memory (HBM) chips, currently used in graphic processing units that train artificial intelligence systems, the Nvidia (NVDA.O), supplier said in a statement.

Mass production is planned to start in the second half of 2028. The new facility in West Lafayette, Indiana will also house a packaging R&D line.

The facility "will help strengthen supply chain resilience" for AI chips in the U.S., CEO Kwak Noh-Jung said.

The engineering talent pool provided by the region's Purdue University, infrastructure for chip manufacturing, and support from the state and local government were factors in the chipmaker's decision, it said.

SK pledged in 2022 to invest $15 billion (108.5 billion yuan) in the semiconductor industry through R&D programs, materials, and the creation of an advanced packaging and testing facility in the U.S.

Last month it began mass production of the latest version of HBM chips, called HBM3E, with sources saying initial shipments are going to Nvidia.

SK Hynix has been the sole supplier of the version previously used - the HBM3 - to Nvidia, which has 80% of the market for AI chips.

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