SK Hynix is pressing the United States to approve additional exports of American chipmaking equipment to its factory in China, while linking that request to plans for a new semiconductor plant in the US.
The South Korean memory-chip maker is negotiating through its US subsidiary Solidigm, which wants to install more equipment at SK Hynix’s NAND flash facility in Dalian.
In return, Solidigm is considering building a new NAND factory in the United States.
The talks show how semiconductor companies are increasingly being forced to balance US industrial policy with the commercial importance of their existing manufacturing bases in China.
FCRF Launches CP-FRM to Build India’s Next Generation of Fraud Risk Professionals
Dalian Plant Sits at Centre of Negotiations
The Dalian facility manufactures NAND flash memory, which is used to store data in smartphones, computers, servers and data centres.
SK Hynix acquired the plant from Intel and has continued operating it in China despite tighter US export controls on advanced chipmaking equipment.
The company wants permission to install additional American-made tools from suppliers such as Applied Materials, Lam Research and KLA.
The equipment would be used in an underutilised part of the facility known as Mod B.
SK Hynix says it is not seeking a broad expansion of the Dalian site, but rather permission to install equipment within existing space.
The company also says it is consulting with the US government and operating under required authorisations.
The request matters because US restrictions make it increasingly difficult for semiconductor manufacturers to upgrade Chinese factories with advanced American equipment.
Without fresh tools, older plants can gradually become less competitive.
Why US Export Controls Matter
The United States has restricted exports of advanced semiconductor equipment to China since 2022.
Washington argues that cutting access to high-end manufacturing technology can slow China’s ability to develop advanced chips used in artificial intelligence, military systems and other sensitive technologies.
The rules have become progressively tighter.
Samsung Electronics and SK Hynix previously benefited from special exemptions allowing them to maintain Chinese plants more easily.
Those exemptions were later withdrawn, forcing the companies to rely on more limited export approvals.
For 2026, US authorities granted annual licences allowing both firms to ship certain equipment to China.
The broader uncertainty remains, however.
Chip factories require constant upgrades and replacement equipment. A facility that cannot install newer tools risks falling behind competitors even if it can continue producing older-generation chips.
That is why the Dalian negotiations have become commercially important for SK Hynix.
New US Factory Becomes Part of the Bargain
Solidigm is considering a new NAND manufacturing plant in the United States as part of the broader discussions.
The company is also weighing a US initial public offering, which could help finance the project.
SK Hynix already has a major American investment underway.
In August, it began construction of a more than $4 billion advanced memory packaging facility in Indiana.
That plant will focus on high-bandwidth memory, or HBM, which is critical for AI processors.
The new NAND proposal would be separate.
It would deepen SK Hynix’s manufacturing presence in the United States at a time when Washington is pushing global semiconductor companies to move more production onto American soil.
US Commerce officials have publicly urged Samsung and SK Hynix to expand manufacturing in the country.
The latest negotiations suggest that companies may now be using future US investment as leverage when seeking flexibility for existing operations in China.
NAND Market Recovery Raises the Stakes
The timing of the talks is also important because the NAND memory market has recovered sharply.
NAND prices fell heavily during the earlier memory downturn, leaving manufacturers with excess capacity and weak margins.
Demand has since improved.
AI infrastructure, enterprise storage and data-centre expansion have helped strengthen the market, while producers have also limited supply.
That makes existing factories such as Dalian more valuable again.
An idle or underused section that made little economic sense during the downturn may now offer useful production capacity.
For SK Hynix, bringing more of that space online could generate cash and support future investment.
But doing so requires access to equipment that remains subject to US export controls.
The negotiation therefore captures a wider contradiction in the global semiconductor industry.
Washington wants foreign chipmakers to invest heavily in US manufacturing while simultaneously restricting the equipment they can use in China.
Companies operating in both markets are trying to preserve existing Chinese assets without losing access to US technology or future American investment incentives.
What this means for you:
The dispute could affect the global supply and pricing of NAND memory used in phones, computers and data centres. It also shows how US-China technology restrictions are increasingly shaping where major semiconductor companies build their next factories.
Follow for daily updates on cybercrime, corporate fraud, DFIR, hacking, investigations, and digital forensics
