Key Takeaways
- SK hynix is weighing making DRAM at Intel’s fab in New Albany, Ohio, the Seoul Economic Daily reported on Nov. 3, in a month in which Intel lost about half its value.
- A memory tenant would bring another company’s demand and money to a fab that Intel has delayed to 2030 and can’t afford to fill alone.
- Nothing is signed. DRAM needs different equipment from Intel’s logic lines, and South Korea’s government may object to having its advanced memory made abroad.
- Intel’s CEO said he hopes to share more on Ohio soon, so the thing to watch is a signed deal that says who pays for the new equipment.
Intel (INTC) has lost about half its value in a month, much of it after a weak fourth-quarter outlook on Oct. 29. But it may have found help with one of its most expensive projects.
On that Oct. 29 third-quarter call, CEO Lip-Bu Tan gave an update on construction at Intel’s fab in New Albany, Ohio, then added: “we continue to evaluate unique and highly differentiated opportunities to accelerate our Ohio build-out, and I hope to share more on this in the near future.”
Five days later, the Seoul Economic Daily reported that SK hynix (SKHY) is weighing making DRAM at that same fab. It could lease part of the plant or form a joint venture with Intel and big US cloud companies. Reuters first reported the two companies’ talks in September.
A memory maker in a fab built for logic chips? That’s about as differentiated as it gets.
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Intel can’t fill Ohio by itself
Intel planned Ohio for its own processors and for contract customers. But big customers took their contract work elsewhere in 2025, and Intel has reportedly pushed the first plant’s completion to 2030 from 2025, with production now set to start in 2030 or 2031.
Intel would have to fund Ohio from an earnings base that’s still small. Analysts expect normalized EPS to climb from $0.42 in 2025 to $2.98 in 2028.
None of those earnings come from Ohio, and a deal wouldn’t change that, because the fab won’t make anything until after these estimates end.
Meanwhile, capital spending is climbing again. Intel spent $4.0 billion in the third quarter, its most in a quarter since early 2025.
CFO David Zinsner said 2027 capex will be “up strongly,” and management has called 2027 an “investment year” with no positive free cash flow. Zinsner also said Intel is “exploring opportunities to accelerate in Ohio,” and that “we remain committed to deleveraging in 2027.”
Shareholders have already chipped in. After August’s stock sale, diluted shares averaged 5.31 billion in the third quarter, up from 4.53 billion a year earlier. Intel can’t speed up Ohio and pay down debt at the same time without someone else’s money.
SK hynix has the demand Intel lacks
That’s where SK hynix comes in. It says its DRAM and HBM output is effectively sold out through 2029, counting existing contracts and volumes it’s discussing with customers. It’s already building an HBM plant in Indiana, and its Solidigm unit is pursuing a NAND plant in New York. Ohio would give SK hynix its first US fab for making DRAM wafers.
Both sides would save money. SK hynix could use Intel’s existing buildings, power and water instead of starting from bare ground. Intel would carry less of the cost of a campus with room for eight fabs.
The site is already cleared for it, too. In 2023, the Commerce Department’s Foreign-Trade Zones Board approved the production Intel planned at New Albany, and memory chips were on the list of products. The paper found that approval in the Federal Register.
DRAM needs different tools
Of course, nothing is signed. The talks were first reported two months ago, and this week an SK hynix official said there was nothing specific the company could confirm about working with Intel or making DRAM in the US.
Even with a deal, Intel’s logic lines and SK hynix’s DRAM lines use different processes and equipment. That could mean more capital spending and redesigned lines, and analysts reportedly see the key question as who pays for it.
A deal to make advanced memory like HBM could also reportedly face opposition from South Korea’s government, which treats the technology as sensitive. And Ohio wouldn’t produce anything until after 2029. So I’d expect SK hynix to commit only once big tech customers sign long-term supply deals that need the capacity.
A tenant would be the right fix for Ohio
I don’t think investors are paying for any of this yet. At Monday’s close, Intel traded at 43x forward earnings. That’s below its five-year average of 50x and a long way from its 173x peak in October 2025.
It’s still far above its 10.6x low in July 2022, so the stock isn’t cheap on earnings alone.
The way I see it, SK hynix is probably the opportunity Tan had in mind, and it’s the best answer Ohio could get. Intel would get another company’s demand and money in a fab it can’t fill or afford by itself, and it wouldn’t have to sell more shares. A deal won’t help the next few quarters, but it would take a big piece of the capex worry off Intel’s plate.
Until Tan’s promised update names a partner and says who’s paying for the DRAM tools, though, all of this is still just talk.
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