WASHINGTON, Aug 6 (Reuters) - The U.S. Commerce

Department said on Tuesday it plans to award SK Hynix ( HXSCF )

up to $450 million in grants to help fund an

advanced packaging plant and research and development facility

for artificial intelligence products in Indiana.

In April, SK Hynix ( HXSCF ), the world's second-largest memory chip

maker, said it would invest around $3.87 billion to build the

facility that will include an advanced chip production line to

mass-produce next-generation high bandwidth memory chips,

currently used in graphic processing units that train artificial

intelligence systems, the Nvidia ( NVDA ) supplier said.

The department also plans to make available $500 million in

government loans for the SK Hynix ( HXSCF ) project, which is expected to

qualify for a 25% investment tax credit.

The memory packaging plant for artificial intelligence

products and an advanced packaging R&D facility will create

1,000 jobs and fill a key gap in the U.S. semiconductor supply

chain, the department said.

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.

Commerce Secretary Gina Raimondo said the department has

announced term sheets with 15 companies offering about $30

billion in funding that "will unlock another $300 billion of

private capital."

The United States now has major commitments from all five

major leading edge semiconductor chip manufacturers - TSMC

, Intel ( INTC ), Samsung Electronics ( SSNLF ),

Micron and SK Hynix ( HXSCF ).

"It means we in the United States will have the most secure

and diverse supply chain in the world for the advanced

semiconductors that power artificial intelligence," Raimondo

told reporters. The department added no other economy in the

world "has more than two of these companies producing

leading-edge chips on its shores."

SK Hynix's ( HXSCF ) West Lafayette, Indiana facility will be home to

an advanced semiconductor packaging line mass producing

next-generation high-bandwidth memory chips that are key

components of graphics processing units that train AI systems.

SK Hynix ( HXSCF ) CEO Kwak Noh-Jung said in a statement the company

deeply appreciates "the U.S. Department of Commerce's support

and are excited to collaborate in seeing this transformational

project fully realized."

Commerce in May said it planned to award $75 million to

Absolics for constructing a facility in Georgia to supply

advanced materials to the country's semiconductor industry. The

planned award is to an affiliate of SKC Co, which in

turn is part of South Korea's second-largest conglomerate SK

Group, as is SK Hynix ( HXSCF ).