Memory chip giant SK Hynix considering setting up packaging plant in India

South Korean chip manufacturer SK Hynix is considering India's semiconductor manufacturing incentive scheme and is in contact with the concerned government officials to set up a packaging facility in the country, The Indian Express (IE) has reported.

The company is primarily involved in the manufacturing of memory chips which includes computing memory, consumer and network memory, and graphics memory. SK Hynix is evaluating India from an assembly and testing destination standpoint, the report said.

Citing a senior government official aware of the development, the newspaper reported, "SK Hynix has shown interest in our scheme, and is currently evaluating it to assess it from their business's perspective. We believe they are in the final stages of submitting a proposal to set up a packaging plant, similar to that of Micron's."

The news comes at a time when Micron has announced its intentions to set up its own packaging facility in Gujarat, making an investment of $2.75 billion. Of this amount, 70 per cent will come from government subsidies from the central and state governments. The company will put in $ 825 million from its own pocket.

Samsung and SK Hynix are key players in the global sales of dynamic random-access memory (RAM) chips. Citing data from a research agency, TrendForce, IE said the two companies hold about 70 per cent of market share. Micron holds about 26 per cent share of this market.

With a total of $10 billion in investments towards the effort, the Centre's initiative to push the manufacturing of semiconductor chips in the country is attracting both local and global private players. The plan provides subsidies of about 50 per cent of the total project cost for establishing the assembly and testing units.

Although there is no official confirmation on SK Hynix setting up its manufacturing facility in India, it is still a sigh of relief as the development has come at a time when Foxconn has parted its way with Vedanta. Foxconn's decision to ditch Vedanta is being seen as a speedbump, if not a setback to the semiconductor manufacturing ambitions of the country.