Sources: US officials have held up approval for US chipmaking equipment needed by SK Hynix to expand in China, complicating its plans for new plants in New York (Karen Freifeld/Reuters)

US officials have delayed granting approval for the equipment necessary for SK Hynix to expand its manufacturing capabilities in China, creating obstacles for the company's plans to construct new memory-chip facilities in New York, according to sources. SK Hynix is requesting US export licenses to equip its Dalian plant, believing that heightened production in China would help finance its intended expansion in the United States.

However, the Commerce Department has not yet approved these new licenses, the sources revealed. Solidigm, a subsidiary of SK Hynix, intends to invest approximately $45 billion and construct two NAND plants in Marcy, New York, with potential future investments nearing $100 billion. NAND chips retain data even without power and are utilized for storage in data centers.

These negotiations underscore the challenges the Trump administration faces in balancing national security considerations and allowing US technology to bolster foreign investment and domestic chip manufacturing. Leland Miller, a member of the US-China Economic and Security Review Commission, stated that the White House must ultimately grant approval for these initiatives.

The White House has not yet commented on the matter. SK Hynix's US subsidiary, Solidigm, has engaged with Commerce Department officials more than ten times since late August, as reported by a source. To generate revenue for building a US facility and maintain competitiveness, SK Hynix must expand production and develop more advanced NAND chipmaking in China, the sources explained.

During a recent meeting, Commerce Under Secretary Jeffrey Kessler maintained his stance against permitting additional American chipmaking tools for capacity upgrades or expansions, although the department has not formally denied a license for exporting such equipment to Dalian. The two parties are also discussing a distinct license for 2027 to maintain the Dalian facility, according to the source.

Solidigm, a company founded and headquartered in the US, has been deliberate in its approach, regularly assessing strategic alternatives to bolster its competitiveness and meet customer demands. The company is currently evaluating options for establishing a NAND memory fabrication at various global locations, but no decision on a particular course of action has been made.

Solidigm reiterated this stance in a statement last week. SK Hynix did not respond to a request for comment outside of business hours.