Sources Link SK Hynix's US Plant to China Equipment Licenses for 2027
Key Facts
SK Hynix is linking construction of a potential US plant to approval to export additional US equipment to its site in Dalian, China, Reuters reported, citing people familiar with the matter. The project under consideration by Solidigm, the group's US unit, involves a NAND memory plant, according to the report, updated Thursday. The sources said the equipment sought for the Chinese site would enable increased output, helping finance the US investment. SK Hynix told Reuters in response: "We are not seeking any expansion in production capacity" in the site's "Mod B" area. The company said equipment installation there was being carried out in close coordination with, and under license from, the US government.
Solidigm wants to install NAND memory production equipment in unused space at the Dalian site, Reuters reported. The news agency identified the site's "Mod B" area as the location for the equipment installation. It attributed the failure to complete the area's fit-out to the earlier downturn in the memory market. The Dalian NAND memory plant was among the assets covered by the agreement to acquire Intel's memory and storage business, according to SK Hynix's announcement of the deal. The total announced value of that agreement was $9 billion, covering Intel's NAND memory and storage business.
Equipment destined for Dalian is subject to a license for 2026 that caps the quantity allowed into the site, according to Reuters. The policy announced by the US Bureau of Industry and Security allows licenses to be issued to former beneficiaries of Validated End-User exemptions. These licenses allow them to continue operating their existing factories in China, according to a statement from the Commerce Department bureau. But the bureau said it did not intend to grant licenses to expand production capacity at Chinese factories. Its announced restrictions also cover technology upgrades at those factories, placing the request for additional equipment within a policy that distinguishes between continued operations and expansion.
A source told Reuters that increased production in China would help Solidigm finance the US NAND memory plant it is considering. The source added that additional output from the Chinese site would provide supplies before the US plant begins operations. The US unit is also considering an initial public offering to help finance the project, according to a source cited by the agency. In the stock market, Reuters said in its Thursday update that SK Hynix shares listed in Seoul fell 11%. The decline came amid a broader selloff in technology stocks, according to the agency.
Alongside the potential NAND plant, SK Hynix has a separate, announced project in Indiana to package high-bandwidth memory. The company said expected investment in the Indiana project exceeds $4 billion. The original project plan estimated investment at about $3.87 billion, according to its earlier announcement of the investment agreement. The plant will receive chips made in South Korea for packaging and testing at the US facility, according to the company. Those chips will then be supplied to US customers, as part of the Indiana plant's stated role in advanced packaging and testing.
On the next steps for the Dalian site, a source told Reuters that the Commerce Department had not, at the time of the report, issued a license for additional US equipment and technology for 2027. The initial public offering under consideration by Solidigm could take place in the year following the report, according to the agency's source. In Indiana, SK Hynix plans to open the cleanroom by October 2028, according to the timetable announced by the company. It aims to begin mass production of next-generation high-bandwidth memory in the second half of 2029. The original project plan anticipated mass production beginning in the second half of 2028.