Intel shares jumped 5.2% in premarket trading Wednesday and SK Hynix rallied after Reuters reported the two chipmakers are discussing a potential U.S. production arrangement that could bring memory-chip manufacturing to Intel’s long-delayed Ohio site.
The exploratory talks could take multiple forms. One scenario would see SK Hynix lease part of Intel’s Ohio facility, while another could involve a joint venture with Intel and major cloud companies seeking secure memory supplies. No structure has been agreed, and the discussions remain preliminary. SK Hynix said it is reviewing various measures, including additional production bases, but that no matters have been determined.
The potential deal goes to the core of Intel’s turnaround challenge: advanced manufacturing only works financially when expensive fabs are heavily utilized. Intel’s Ohio project was announced in 2022, but production at its first two plants has been pushed back to 2030 and 2031. Bringing in SK Hynix could help fill capacity and reduce Intel’s financial burden, especially during an AI-driven memory shortage in which SK Hynix is the leading supplier of high-bandwidth memory.
Wall Street had already been building a bullish case. Tigress Financial raised its Intel price target to $145 from $118, pointing to stronger Xeon demand, improving 18A execution, operating leverage, and the Terafab partnership. Northland Securities upgraded Intel to Outperform with a $120 target, arguing that Terafab could materially benefit Intel’s foundry business by providing scale. Still, Intel shares have already risen about 292% over the past year, leaving less room for another false start. Piper Sandler initiated coverage with a Neutral rating and a $110 target, saying it would wait for a better entry point.
There are also obstacles. Seoul could scrutinize any transfer of advanced DRAM or HBM production because those technologies are considered strategically sensitive under the Industrial Technology Protection Act. Manufacturing in the United States is also more expensive than in South Korea. SK Group chairman Chey Tae-won said in July that customers and governments were putting serious pressure on the company to increase supply, adding that building a U.S. factory may be necessary. However, Washington and Seoul are pulling in different directions, with U.S. officials pressing for more domestic semiconductor production while South Korea wants SK Hynix and Samsung to accelerate work on a domestic chip cluster.
For cryptocurrency markets, the development is not directly tied to digital assets. It may influence broader technology and AI-related semiconductor sentiment, but no cryptocurrency token or blockchain ecosystem is directly implicated.
