Intel, SK Hynix shares jump on report they're discussing U.S. memory chip manufacturing

SK Hynix is in talks with Intel to manufacture its memory chips in the U.S. for the first time, Reuters reported Wednesday, sending shares of both companies higher in premarket trading.

Intel rose 5% while SK Hynix's Nasdaq-listed shares were 3% higher.

Intel and SK Hynix shares year-to-date.

Under one scenario, SK Hynix would lease part of Intel's chipmaking facility in Ohio, Reuters reported, citing people familiar with the matter. Intel and SK Hynix could also form a joint venture with Intel and major cloud firms, Reuters said.

SK Hynix could also look at other ways to structure the deal, the news agency reported. The talks are exploratory, and no decisions have been ​made, one of the sources told Reuters.

If a deal is struck, it would be a big win for Intel, which has been looking to gain marquee customers for its manufacturing, or foundry business, which is a key pillar of CEO Lip-Bu Tan's strategy. It would also mark a win for the U.S. government, an investor in Intel. The government has been looking to draw more advanced semiconductor manufacturing to American shores.

SK Hynix is one of the world's leading suppliers of high-bandwidth memory (HBM), a key component of Nvidia's chips. It also produces other types of memory chips that are crucial for AI applications.

A deal between Intel and SK Hynix to manufacture advanced memory like HBM could face opposition from the South Korean government because the technologies are considered sensitive, Reuters reported, citing three sources.

SK Hynix, which listed its American depository receipts on the Nasdaq in July, has been a big beneficiary of the AI boom. The rush to build data centers has created a shortage of memory chips, sharply driving up prices and enabling SK Hynix and its rival Samsung to rake in huge profits.

SK Hynix's South Korea-listed stock is up 400% over the last year.