SK hynix makes its case in West Lafayette. A Q&A

With a zoning question and neighborhood protest holding up a $3.87B chip facility, SK hynix officials say the company can ‘ultimately win over their support.’ First community meeting set for Friday.

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Q&A: SK HYNIX OFFICIALS MAKE THEIR CASE IN WEST LAFAYETTE

SK hynix officials say they are confident they can win the trust of those living near a planned $3.87 billion advanced chip packaging facility, heading into the first in a series of community meetings Friday – all leading to a crucial vote May 5 by the West Lafayette City Council.

“If we concentrate on the communication with the local community, which was lacking up until now, we are certain that we will be able to gain their support,” NK Kim, a senior vice president with the South Korean semiconductor giant, told Based in Lafayette Thursday.

At stake is what’s turned into a controversial industrial zoning plan that would clear the way on 121 acres north of Kalberer Road, between Yeager Road and County Road 50 West, for a site SK hynix officials say would be best for a facility that has been touted as one of the largest economic development projects in Indiana’s history.

This is what SK hynix officials say the West Lafayette facility would look like, looking from the south. (Image: SK hynix)

SK hynix and Purdue Research Foundation officials last week asked for a one-month delay in a final vote on the rezoning, after nearby neighborhood pushback over safety concerns – including from some Purdue researchers in the semiconductor field – led to a 9-5 vote by the Area Plan Commission to recommend denial of the rezoning request. West Lafayette City Council members, surveyed last week before they had a final saw on the zoning matter, were leaning against the request, too.

Friday evening, SK hynix officials plan to make their case in the first of several community meetings, just over a year since announcing plans to produce high-bandwidth memory used to feed the artificial intelligence market in West Lafayette by the second half of 2028.

Before that, Kim and Woong-Sun Lee, senior vice president at SK hynix, along with Chad Pittman, president and CEO of Purdue Research Foundation, sat down Thursday with Based in Lafayette to discuss the company’s plans; why it prefers the site under rezoning consideration over a site on the east side of Yeager Road initially targeted; and how the company is looking to address concerns from neighbors – and whether the protest might derail the project.

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Question: Were you surprised by the recent neighborhood protests over the rezoning request and where the facility is looking to go? It’s been a year since SK hynix’s plans were announced. Were you surprised by the reaction that bubbled up now?

NK Kim: I will say that the company was very surprised by this opposition from local residents. Throughout the investment decision making process, we were collaborating with state government, the city of West Lafayette and Purdue University, and so we were feeling that everything was operating smoothly – the whole process was going smoothly.

During the investment decision-making process, we were thinking that Site A and Site B would be both used as a complete ecosystem that houses both our facility but also our supply chain partners. But this was a learning opportunity for us that we should have listened more carefully to the local residents and made more effort to approach them and engage with them.

Question: Do you feel you need to get beyond what city officials are saying to you, what PRF is saying and what the university is saying to make sure you get across what SK hynix wants to accomplish at this site? In my view, SK hynix coming here has seemed just like a concept in many ways in people’s minds over the past year. This has been the first concrete feel of it, when the rezoning signs when up on the Site B.

NK Kim: When we were pursuing these sites, we had justifiable reason and expectations to pursue Site B. We were given positive support from the PRF and the city.

Question: What is the reason Site B is better than Site A, from SK hynix’s point of view?

NK Kim: There are several reasons to why we prefer Site B. Site B, in comparison to Site A, is much bigger, spacious and more rectangular shaped. So, in terms of building layout, it is more efficient from my perspective. Site A only has one access road, which is Yeager Road, which is prone to cause traffic jams and inconvenience to many parties, whereas Site B has more access roads alleviating those problems.

Furthermore, Site B has a commercial district to the south and a flood plain to the east, each of which has around 400 yards of buffer between itself and the residential zone. So, it has more distance, which helps us do our job better in terms of operating the plant.

Also, the commercial district to the south of the proposed site, it can be utilized to build childcare service centers, hospitals and wellness centers. And due to its closeness to the fab, it can be developed further to enhance the welfare of the local community.

Question: If this rezoning doesn’t go through, is SK hynix prepared to go back to Site A, which is already zoned for the use?

NK Kim: For the moment, SK hynix wants Site B. The voting of the city council has been postponed to early May. And until that time, we will do our utmost to communicate with the residents to address their concerns and to correct any misinformation, and through these efforts, ultimately win over their support.

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Question: What miscommunications do you think came from neighbors, whether in their petition or at the APC meeting in March? That would include from some semiconductor experts on Purdue’s campus who were among those leading the conversation that night?

NK Kim: I’m not an engineer, so I cannot provide exact data. But I can say that what they pointed out were relevant to things of the past, circumstances of a long time ago. It can be said that certain negative overall opinion at that time, during the APC meeting, had an influencing factor.

As announced before, (Friday), April 11, at 6:30 p.m. at the Convergence Center, the experts who have flown in from Korea will address safety, health and environmental concerns, using the data they have at their disposal, track records and our examples of best practices to alleviate and address such concerns.

Question: I know you can’t get into their minds, but why would experts in the field have these impressions of what is coming? If that’s in the past, why would they still believe this if they’re running the semiconductor research programs at Purdue, which presents itself a semiconductor leader in research? Or are they right?

Chad Pittman: I think there were two semiconductor professors there. However, I don’t think that’s the perspective of the semiconductor group … if you talk to the university and professors. I think there will be some there (Friday). I can say, as president and CEO of PRF, is if there is anybody that communicated a health risk to this community in this project right here, we would not be moving forward. … We had a very positive conversation (with one of those professors) about this project and offered that if he had residual risk concerns to let me know. As president and CEO of PRF, of course, I’m going to hold the safety of the community, my employees that live here in the community, the tenants in this park, the tenants at (Indiana Manufacturing Institute) right next to these sites first and foremost, along with our partners at SK hynix.

Question: You mention that the two sites would work as an ecosystem of some sort. What happens if only one of those sites is available? Where do suppliers go? Or where does SK hynix put its fab instead?

NK Kim: The characteristics of the semiconductor industry is that the fab and the supply chain partners have to be in the vicinity of one another. They have to be close by, because the fab is operated 24/7. In order to receive timely support, the supply chain partners have to be nearby. We have not thought about separating them. This is why we still want Site B and will do our utmost to dispel any concerns or alleviate any concerns through clear communication with our local community and to win over their support.

Question: How many suppliers are we talking about? And how close do they need to be?

NK Kim: We are estimating a little over 143 supply chain partners. Their type ranges. There is a diverse range of suppliers. Some are suppliers of materials, some are suppliers of equipment. It depends. In cases where we can stock up on these supplies on our fab, then perhaps it could be sited some place farther away. But some materials need to be close at hand, due to the 24/7 calculations of the facility. Those need to be right close by.

(Photo: Dave Bangert)

Question: More than right-on-time suppliers, they’re like an extension of the fab?

NK Kim: Yes, that is correct.

Woong-Sun Lee: At any point, we're running more than 100 different pieces of equipment. To provide optimal maintenance, these supply chain partners have to be nearby to do the maintenance, and if needed, provide the materials.

Question: If you have 143 supply chain partners, do they all fit in Site A? Or are some going to need to be somewhere else?

NK Kim: As I said, not all 143 supply chain partners are the same. Some materials that we can store on site, those partners can be sited further away. So, it depends. But we are still under discussion with these local partners, so nothing's confirmed at the moment.

Question: Have you looked at any other sites in West Lafayette since this has come up? Or any other place outside West Lafayette in Indiana? Or even beyond, because of the zoning question in West Lafayette?

NK Kim: Other than doing our utmost to get this rezoning approved for Site B, we’re not looking to any other location. The characteristics of this advanced packaging facility is that it requires close R&D collaboration with Purdue University, which was one of the backgrounds of us making this decision to come here. As I said, if we concentrate on the communication with the local community, which was lacking up until now, we are certain that we will be able to gain their support.

(Image: SK hynix)

Question: What are you going to tell the community that you think will change their mind from what they said that night at the APC and in petitions, to May 5 where the city council will feel comfortable to say yes to this rezoning?

NK Kim: The information session scheduled for (Friday) is not going to be the last one. There are going to be more. (Friday), we are going to touch on subjects such as introduction of who we are. Second, is the best practice that we have accumulated – the track record we have accumulated – over the 40 years of operation of our company's history. Thirdly, data that will address the concerns related to safety, health and environment. And lastly, SK Hynix’s commitment to engaging with the local community. Those are some of the major subjects that we will touch upon in (Friday’s) meeting. Through that, we will gain people's understanding and support.

Question: Will (Friday’s) session be different than the following sessions? Or will they be repeated so people can come and get the same presentation later?

NK Kim: We’re not going to repeat the same content. What I mean by that is, there will be a lot of questions raised by the local residents (Friday). And we will incorporate their questions and incorporate the relevant answers to the ensuing sessions.

Question: You’ve talked about safety a little bit. People have been repeating a five-mile radius concern, contending that not if, but when there’s a problem, people living that far away would be affected. What’s your response to that? Is that a misguided information? Or is that something real?

Woong-Sun Lee: We have facilities in Icheon and Cheongju, Korea. To take the Icheon facility as an example, within a 0.6-mile radius, there are over 10,000 residents living close to the facility.

Question: So, you feel comfortable that is not going to be something that people should put stock in or that they should believe in?

Woong-Sun Lee: Yes.

Question: As you're talking about safety issues that people are asking about, is there anything else you plan to highlight that will give people those assurances? Is there an example of what you've heard people raise concerns about that you want to address directly?

Woong-Sun Lee: Since 1983, we've been operating in Incheon and Cheongju city of South Korea for over 40 years, and there has never been a major environment or safety-related incident happening during that period of time.

Question: If you’re giving a layman’s terms description of what is going to happen and be produced at this fab, how do you describe the manufacturing process?

Woong-Sun Lee: To put it simply, an advanced packaging fab is assembling wafers that have been produced elsewhere. We are integrating them. That is what we are calling packaging. A more up-to-date term – instead of advanced packaging, which is outdated – would be heterogeneous integration. By integrating various wafers, each of which has a different function, we are creating something that has an entirely new function, but we're doing it at very low cost and very energy efficiently. To give you an idea, compared to a front-end manufacturing process where we manufacture one wafer, this advanced packaging operation has 20% of the number of operational steps than what you would expect from producing a single wafer.

Question: The question has come up about the difference between packaging and producing a single wafer, in terms of production. You say it’s fewer steps. Compare that for people who are reading about chip manufacturing and wondering if that’s happening here. Can you put that into perspective?

NK Kim: If I may interject and try to explain this in layman’s terms. I’m not an engineer. (Picks up a piece of paper.) If this were a single wafer produced from the front-end fabrication process, what we do is stacking different wafters eight times or 12 times, depending on the technology. That would basically be what we’re doing.

Question: There’s been a lot of talk about water in this community over the past few years. I'm sure you've kept up with the questions about a proposed pipeline from Tippecanoe County to the LEAP district and all the rest of it. How much water does this fab take? And where are you getting the water?

Woong-Sun Lee: By our estimation, we expect to be using around 2.8 million gallons per day, on an average basis.

(Note: According to PRF, the water would come from Indiana American Water, which supplies West Lafayette.)

Question: For comparison, how much water would a front-end chip fab need?

Woong-Sun Lee: Yes, the chip fab would use a lot more water than us. But you have to take into account that the front-end manufacturing process has more steps, and these front-end facilities tend to be larger. So, it's not exactly an apples-to-apples comparison.

Question: Will there be some kind of water recycling done by SK hynix? Or is it more of a water in/water out process?

NK Kim: I can say that at our headquarters in Korea, we are recycling our water. With regards to this Indiana facility, we are currently reviewing the most suitable option for this facility.

Question: The zoning issue aside, how have you found West Lafayette? How have you felt SK hynix has been received? How many people from the company are already here?

NK Kim: We have not fully penetrated the local community, yet. But we already have 12 ex-pats settled down here. … Right now we only have small scale of people focused on rezoning, getting the permits and getting ready for construction. But starting in 2027, we will see a huge upsurge in the number of people who will be fully involved In the operation.

Question: Do you have specific concerns about people from SK hynix coming to the community, whether that’s housing or other issues you are looking to, as you say, penetrate into the community?

NK Kim: Right now, we're meeting many stakeholders from the local community who are very eager to help us and people coming in from Korea to settle down. We're having a lot of conversation with them and doing a collaborative brainstorming to figure out the solutions. We have already received a tremendous welcome from Purdue Research Foundation, and we're gaining continuous growing support from the citizens of West Lafayette. Because of all this support, I don't see any problem for us integrating to this community. To give you my personal story, yesterday I signed a rental contract for a house right next to Site B. Other experts are residing in close vicinity neighborhoods, such as University Farm.

Question: We’ve used the number $3.87 billion for this project. Is that still a good number? Or has that gone up or down?

NK Kim: Yes, $3.87 billion is the figure we negotiated with the federal government, so it is still valid. Of course, we have to take into account the changes in the Consumer Price Index and little adjustment factors. But for now, $3.87 billion is still a valid figure.

Question: Would ongoing questions about tariffs fall into that? All kinds of projects have concerns about the tariffs on steel and everything else. Has that factored into your construction estimates?

NK Kim: With regards to tariffs, we don't really have enough information to give out a statement on a company level.

Question: Is SK hynix still aiming at 800 to 1,000 jobs once the facility is built out?

NK Kim: Approximately 1,000. That 1,000 refers to individuals that will be direct hires by the company SK hynix. But during the construction phase, we will require 3,000 construction labor workers. And during the operational phase, when you consider the supply chain partners and all those service product providers, we're looking to add another 3,000.

Question: We talked a little bit about you being surprised by the rezoning issue, but is there something different you wish you had done before we were at this moment today?

NK Kim: If we can turn back time, yes, we probably could have done more to engage with the local community. That is small regret. But even if we can't turn back time, there will be no difference in our decision to locate in West Lafayette, to collaborate R&D with Purdue University and to for choosing Site B is our primary site.

IF YOU GO

• The first of three community meetings on the SK hynix project will be 6:30 p.m. Friday, April 11, at the Convergence Center, 101 Foundry Drive in West Lafayette. The session will include an hourlong presentation and Q&A with SK hynix representatives. Free parking is available in the Convergence lot and on the streets behind the center. Times and dates for the next two meetings will be announced later, company officials said.

• A pair of rezoning requests connected to the project – north of Kalberer Road, between Yeager Road and County Road 50 West/Salisbury Street – has been rescheduled for a city council vote at 6:30 p.m. May 5 at city hall, 222 N. Chauncey Ave.

• Neighborhood groups continue to circulate a petition against a rezoning plan north of Kalberer Road. Here’s a look at the petition.

FOR MORE

Here’s how the site planning and rezoning issues for SK hynix have played out in recent weeks:

• March 16: SK hynix eyes new WL site for $3.87B chip facility, up for rezoning this week

• March 20: Rezoning for $3.8B SK hynix facility gets thumbs down from APC

• March 23: WL City Council survey: Still unsure on SK hynix rezoning

• March 26: Rezone request for $3.8B SK hynix facility on hold, for now

• April 3: ‘Humbling opportunity:’ SK hynix sets community meetings after $3.87B plans run into neighborhood protest

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