Samsung, SK Hynix upgrading China plants to make more advanced chips: Sources
They are working to manufacture flash NAND memory chips with more than 200 layers in China.
Samsung Electronics and SK Hynix are upgrading their China factories to produce more advanced memory chips, sources say. The move aims to counter competition from a rapidly growing Chinese rival and meet the soaring demand for AI chips. The South Korean semiconductor giants are striving to manufacture flash NAND memory chips with over 200 layers, matching the level of production in South Korea. This will enable them to offer greater storage density and lower costs, a crucial factor in the burgeoning AI market.
The upgrades come at a time when the US has imposed export controls on chip-making equipment since 2022, seeking to curb China's technological progress. As a result, both Samsung and SK Hynix now require annual US licences for installing US-made equipment in their Chinese plants, including etching machines. The Bureau of Industry and Security (BIS) of the US Commerce Department has stated in 2025 that it does not intend to grant licences for upgrading technology and expanding capacity at the foreign chipmakers' factories in China.
This regulatory uncertainty has limited their ability to refit their factories, thereby contributing to a loss of market share to a Chinese startup named Yangtze Memory Technologies (YMTC).
Executives at Samsung and SK Hynix have acknowledged the impact of geopolitical tensions on their Chinese operations, warning that they are undermining business prospects. The two companies have confirmed to Reuters that the upgrades are underway and being carried out in close coordination with Washington. However, they have not disclosed details of the production plans, which have not been reported publicly before.
Despite these challenges, the companies are determined to maintain their competitiveness in the Chinese market. Samsung's plant in Xian, which contributes around 40% of the company's global NAND output, is being converted to produce 286-layer V9 NAND chips. The company aims to achieve a monthly output of 5,000 wafers in December 2026 and increase this to 40,000 wafers by December 2027.
SK Hynix, meanwhile, is planning to manufacture NAND products with 240 layers or more at its Dalian facilities in north-eastern China, where it currently produces products with 192 layers. The company has acquired the Dalian site when it purchased Intel's NAND operations in 2021 and remains the sole NAND chip manufacturing site for its subsidiary, Solidigm, which is set to go public in the US.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
