Indiana neighbors take SK Hynix's $3.9 billion plant to court as the board weighs a $12 billion payout
A judge sent the fight over the West Lafayette plant to trial on December 1, and the board decides Wednesday on a reported $12 billion special dividend. Together they show where the company thinks the memory cycle peaks.
Vincent Jiang · 3 min read
Tippecanoe Circuit Court Judge Sean Persin ruled Thursday that a residents' lawsuit against SK Hynix's+2.88% — SK Hynix, up 2.88 percent today $3.87 billion AI memory plant near Purdue University will go to trial on December 1, rejecting the city's and the Korean chipmaker's bid to dismiss the case 1. A pre-trial conference was set for October 26 1. SK Hynix plans to package high-bandwidth memory, the chips AI data centers use, with volume production expected in 2029 1.
Three West Lafayette residents sued after the city council voted 6-3 in May 2025 to rezone a 133-acre Purdue Research Foundation parcel, surrounded by homes, from residential to heavy industrial 1. Six weeks before that vote, the area plan commission had voted 9-5 to recommend denial 1. Attached to the project: $458 million in CHIPS Act grants and up to $570 million in federal loans 1.
While the lawyers prepare, the builders build
Construction has not paused. Industry sources reported Monday that SK Hynix recently secured new permits for power and gas facilities at the West Lafayette site, and that a subsidiary of CK Solution, a semiconductor facilities contractor, won a construction contract worth about 147.7 billion won ($111.5 million) last month 2. Air Liquide, the French industrial gas company, plans more than $170 million for two Indiana gas plants supplying the plant, with cleanrooms due October 2028 2.
The cash-signal sitting on the same desk
The same company's board decides Wednesday what to hand shareholders. SK Hynix told the Korea Exchange on Monday it is reviewing shareholder-return measures, answering a Dong-A Ilbo report (the Korean newspaper broke the story) of a ₩16 trillion ($12 billion) special dividend, funded by gains from selling down its stake in Kioxia+0.44% — Kioxia, up 0.44 percent today, the Japanese NAND flash maker SK Hynix backed in 2018 345. The payout would be ten times 2025's entire dividend and land on top of a finished ₩40 trillion buyback 345.
The reported special dividend is ten times the entire 2025 payout
- Estimate
Data
| Value | |
|---|---|
| 2025 dividends paid | $1.16B |
| Reported special (unconfirmed) (estimate) | $12B |
| Buyback approved Aug 2026 | $30B |
Read the combination as a cycle signal. Trailing free cash flow is ₩91.7 trillion, capex is guided to the high-₩40 trillion range, and FnGuide consensus expects ₩98.23 trillion in third-quarter revenue with ₩76.96 trillion operating profit 24.
Yet the US NAND fab that Solidigm was meant to fund, whose listing SK Hynix paused on October 23 after shareholders argued it would deepen the parent's discount, has no named financing plan 5. A near-full payout of the Kioxia windfall, while one fab goes unfunded and another sits in court, suggests a board returning a cyclical windfall rather than committing it to new capacity. That is the market's clue about where the memory cycle peaks.
The two dates that answer it
Two dated events close the question. On October 28 the board announces its shareholder-return package with third-quarter results, subject to approval 35. A figure near the reported ₩16 trillion would confirm the company thinks the memory-cycle peak is now, worth handing back rather than building on 1. On December 1, the West Lafayette trial opens, where three residents will try to unwind the rezoning under a $3.87 billion plant already under construction 1.
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