WASHINGTON Dec 19 (Reuters) - The U.S. Commerce

Department on Thursday finalized an award to SK Hynix ( HXSCF )

of up to $458 million in government grants to help

fund an advanced chip packaging plant and research and

development facility for artificial intelligence products in

Indiana.

In April, the Nvidia ( NVDA ) supplier said it would invest

$3.87 billion to build the West Lafayette facility which will

include an assembly line to mass produce next-generation high

bandwidth memory chips. The chips are used in graphic processing

units that train artificial intelligence systems.

The department also plans to make available $500 million in

government loans for the SK Hynix ( HXSCF ) project. The grant funds would

be distributed when SK Hynix ( HXSCF ) meets project milestones.

The project will create 1,000 jobs and fill a key gap in the

U.S. semiconductor supply chain, the department said.

Kwak Noh-Jung, CEO of the world's second-largest memory chip

maker, said in a statement the company looks forward to working

"to build a robust and resilient AI semiconductor supply chain

in the U.S."

Congress in August 2022 approved a $39 billion subsidy

program for U.S. semiconductor manufacturing and related

components along with $75 billion in government lending

authority.

The Commerce Department is awarding major grants to all five

leading semiconductor manufacturers - TSMC, Intel ( INTC )

, Samsung Electronics ( SSNLF ), Micron and SK

Hynix ( HXSCF ). The department has now finalized all of those but the

$6.4 billion Samsung award.

This month it finalized a $75 million award to Absolics for

constructing a facility in Georgia to supply advanced materials

to the country's semiconductor industry. Absolics is an

affiliate of SKC, which in turn is part of South

Korea's second-largest conglomerate SK Group, as is SK Hynix ( HXSCF ).