SK Hynix is reportedly in discussions with the U.S. government, proposing the construction of a new NAND flash factory in the United States. In return, the South Korean semiconductor giant is seeking approval to import more American-made semiconductor equipment for its existing Dalian, China facility.
Strategic Moves in a Shifting Landscape
According to sources familiar with the matter, SK Hynix aims to leverage increased production capacity at its Chinese plant to help fund the development of the proposed U.S. facility. This initiative is part of a broader strategy to gradually expand its manufacturing footprint within the United States.
The U.S. government has been actively encouraging overseas semiconductor firms, including SK Hynix and Samsung Electronics, to establish or expand manufacturing operations on American soil. This push is driven by a desire to bolster domestic production capabilities and create new employment opportunities. The global demand for storage chips, particularly NAND flash, has been on the rise due to the burgeoning needs of AI and cloud computing data centers, leading to increased prices and prompting manufacturers to consider capacity expansions.
Dalian Facility and Equipment Needs
SK Hynix’s U.S. subsidiary, Solidigm, is reportedly looking to install additional equipment in an underutilized area of its Dalian plant, known as Mod B. This section of the facility, completed in 2023, was intended for NAND flash production but saw its equipment installation halted due to a downturn in the memory market at the time.
Sources indicate that while some equipment has been installed in Mod B, there is still ample space for more production tools. Solidigm has apparently filed for export licenses to acquire the necessary additional equipment for this area. The semiconductor equipment intended for the Dalian plant originates from U.S. manufacturers such as Lam Research, Applied Materials, and KLA.
SK Hynix commented to Reuters that the equipment installation in Mod B is being conducted in close consultation with and under authorization from the U.S. government. The company emphasized that it is not seeking to increase the production capacity of Dalian Mod B at this time. Solidigm declined to comment on the matter.
U.S. Expansion and Future Prospects
This development follows a Reuters report from September, which stated that Solidigm was considering building a new NAND flash factory in the U.S., with Northern New York being a prime candidate location. The prospect of increased output from the Dalian plant is seen as a potential source of revenue to finance the construction of the new U.S. factory and facilitate future expansion of domestic production.
Adding to its U.S. investment plans, SK Hynix is also reportedly in discussions with Intel regarding the potential lease of a portion of Intel’s planned semiconductor manufacturing facility in Ohio. Furthermore, the company has already commenced construction of an advanced packaging plant in Indiana, which will focus on High Bandwidth Memory (HBM) products.
Another source revealed that Solidigm is considering a potential Initial Public Offering (IPO) as early as 2027, which could provide the capital needed for the new factory’s construction.
