Sources Link SK Hynix's US Plant Plan to China Equipment Licenses; Company Denies Dalian Expansion
Key Facts
Reuters cited sources as saying that SK Hynix's plan to build a new US NAND memory plant is contingent on obtaining a license to ship chipmaking equipment to China. The license concerns equipment for the Chinese Dalian facility of its Solidigm unit, linking the proposed US project to US approval. A source told the agency that increased production in China would help Solidigm fund the memory production facility in the United States. Responding to the matter, SK Hynix denied in a statement to TechCrunch that it was seeking to expand production capacity at the Dalian "Mod B" facility. The report places funding for the proposed US plant at the heart of the licensing issue, while the company's denial focuses on expanding capacity at the Chinese facility.
Solidigm traces its origins to the transfer of Intel's solid-state drive business to a new SK Hynix subsidiary, according to Intel's announcement. Intel said when announcing the transfer that the business would become part of the newly established company named Solidigm. In Dalian, the memory plant uses equipment from Lam Research, Applied Materials and KLA, according to Reuters. These are the equipment suppliers the agency named in its details of the Chinese facility associated with the US license application. The funding link reported by the agency, citing its source, is that increased Chinese production would help Solidigm finance its proposed plant in the United States.
The equipment approval issue comes after the US Bureau of Industry and Security ended an exemption that allowed some foreign companies to export semiconductor manufacturing equipment and technology to China without licenses. The bureau said in its statement: "These companies will now need to obtain licenses to export their technologies, placing them on an equal footing with their competitors." Exports covered by the previous exemption have consequently become subject to approval requirements from US authorities. The bureau defined its policy toward former participants in the exemption program as allowing licenses that enable their existing factories in China to continue operating. This stated approach applies to operating existing facilities as the companies concerned move from the exemption to a licensing system for equipment and technology exports.
By contrast, the Bureau of Industry and Security said it did not intend to grant licenses aimed at expanding production capacity at Chinese factories or upgrading the technology used in them. Its position was stated directly: "The bureau does not intend to grant licenses to expand production capacity or upgrade technology at factories in China." US policy thus distinguishes between allowing continued operations and approving increases in manufacturing capacity or upgrades to manufacturing technology. Semiconductor manufacturing controls announced in October 2022 included a threshold covering NAND memory chips with 128 layers or more. This threshold falls under US manufacturing controls, alongside the licensing policy that distinguishes between operating existing Chinese factories and expanding them.
In the memory market, TrendForce forecast that NAND contract prices would rise 15–20% quarter on quarter in the fourth quarter of 2026. The firm's forecast concerns contract prices in that quarter compared with the previous quarter, according to its published market estimate. The firm described demand as split between accelerating artificial intelligence needs and weak consumer demand. On the artificial intelligence side, it pointed to accelerating demand, while the consumer side remained weak, according to its assessment. Its fourth-quarter forecast combined this divergence in demand with an expected increase in memory contract prices, the market targeted by the proposed US NAND plant.
SK Hynix has a separate US project in Indiana dedicated to advanced packaging for high-bandwidth memory, according to the company's announcement. Total expected investment in this project exceeds $4 billion, according to the estimate it announced at the groundbreaking. The company had estimated investment at about $3.87 billion in its original announcement. The latest estimate is therefore higher than the amount in the original investment agreement for the Indiana project. This spending concerns the advanced memory packaging project, while the Reuters report concerns plans to build a new NAND memory production plant and their link to licenses for equipment bound for China.
According to the timeline SK Hynix announced for the Indiana project, the company aims to open the cleanroom by October 2028. It aims to begin mass production of next-generation high-bandwidth memory in the second half of 2029. The project's original plan targeted the start of mass production in the second half of 2028. The latest timeline shifts the targeted production date from the second half of 2028 to the second half of 2029. The company's announced schedule separates the cleanroom opening in October 2028 from the subsequent start of mass production, with the Indiana facility dedicated to packaging the next generation of this memory.