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 The US Commerce Department said on Thursday it has decided to grant up to US$458 million in direct funding to SK hynix’s project to build a new plant in the state of Indiana. 

The U.S. government will also provide up to $500 million in loans, both under the CHIPS and Science Act, according to the U.S. Department of Commerce.

In April, the company announced a plan to invest $3.87 billion to build a memory packaging plant for artificial intelligence (AI) products, and an advanced packaging research and development facility in West Lafayette in the U.S. state to produce next-generation memory chips, reports Yonhap news agency.

"By investing in companies like SK hynix and communities like West Lafayette, the bipartisan CHIPS and Science Act continues to supercharge America's global technology leadership," U.S. Secretary of Commerce Gina Raimondo said in a statement.

The Commerce Department added that the agreement "represents a significant step in advancing the security of the U.S. supply chain," adding the project will fill "a critical gap in the U.S. semiconductor supply chain."

"SK hynix looks forward to collaborating with the U.S. government, the state of Indiana, Purdue University and our U.S. business partners to build a robust and resilient AI semiconductor supply chain in the United States," SK hynix CEO Kwak Noh-Jung said.

Meanwhile, other major global chipmakers, such as TSMC, Intel Corp. and Micron Technology, have also finalized their agreements with the U.S. government for subsidies under the CHIPS Act.

Samsung Electronics Co. is currently in discussions with Washington for a subsidy worth $6.4 billion in direct funding, said the report.