Key points
- SK Hynix's US chip plans face a licensing delay
- Washington hasn't approved new equipment for SK Hynix's Dalian fab
- SK Hynix says some Dalian work already has US authorization
US officials have held up approval for American chipmaking equipment at SK Hynix's (SKHY) memory fab in China, complicating the company's plans for new NAND plants in New York, Reuters reported on November 3.
The Dalian fab belongs to Solidigm, SK Hynix's US-based flash-memory unit. Reuters reported that Solidigm plans to invest about $45 billion in two NAND plants in Marcy, New York, with total investment potentially reaching about $100 billion over time. Solidigm says it hasn't made a decision. Upstate New York first emerged as the leading site in September.
The Commerce Department has neither approved nor formally denied the new Dalian licenses, Reuters reported. SK Hynix argues that additional output from the Chinese fab would help fund the US expansion.
SK Hynix shares were up 2.0% at $150.61 as of 2:38 p.m. ET on November 3.
Solidigm wants to fill empty space at its Dalian fab
SK Hynix agreed in 2020 to buy the NAND and SSD business of Intel (INTC), and the Dalian fab changed hands at the end of 2021. Solidigm now wants to install new NAND equipment in unused space at the site, a building known as Mod B, Reuters reported on October 14.
Mod B was built in 2023, but its equipment buildout was never finished because of the memory downturn, according to that report. The building already holds some tools, and the fab runs on equipment from Lam Research (LRCX), Applied Materials (AMAT), and KLA (KLAC).
Solidigm executives have met with Commerce officials nearly 10 times since late August, Reuters reported on November 3.
Washington has said it doesn't expect to approve expansion in China
Until the end of last year, SK Hynix and Samsung held waivers that let them ship US equipment to their China fabs without applying for individual licenses. Commerce revoked them, calling the arrangement a "Biden-era loophole," and the waivers ended on December 31, 2025.
In December 2025, Commerce gave SK Hynix a license for Dalian covering 2026 that limits the quantity of equipment. The department said it would let existing fabs keep operating but didn't expect to approve licenses to expand capacity or upgrade technology, according to Reuters.
Commerce Under Secretary Jeffrey Kessler has held to the position that the US won't allow more American tools to expand or upgrade capacity at Dalian, Reuters reported. A separate license for 2027, covering equipment to keep the Dalian plant running, is still under negotiation.
SK Hynix says the Dalian work has US authorization
SK Hynix said in an October statement to Reuters that the Mod B equipment installation "is being carried out in close consultation with and under authorization from the US government." The company also said it isn't seeking to expand capacity at Mod B.
Solidigm said it is "currently exploring options for building a NAND memory fab at potential locations around the world" and that no decision has been made. The White House and Commerce didn't immediately respond to requests for comment, Reuters said.
New York is preparing a site and an incentive package
Marcy Nanocenter, an industrial site in Oneida County, is the leading candidate for the plant, Seoul Economic Daily reported on November 3. The site is about an hour's drive from Clay, New York, where Micron (MU) is building a DRAM plant.
A support package is expected to take shape around November 20, the paper reported. SK Hynix said on October 29 that it would disclose details of the Solidigm investment once they are confirmed, or within one month.
Solidigm lost one way to raise money on October 23, when SK Hynix dropped its plan for a Solidigm IPO. Solidigm had been looking at ways to raise funds to expand production capacity, SK Hynix's filing said. A single NAND fab with capacity for 100,000 wafers a month costs roughly $40 billion to $50 billion, according to Seoul Economic Daily.
"Ultimately, none of this is going to go forward without a green light from the White House," said Leland Miller, a member of the US-China Economic and Security Review Commission, according to Reuters.
That leaves SK Hynix with three things in play. The Solidigm IPO was dropped on October 23. Commerce hasn't approved the Dalian licenses, which SK Hynix argues would help pay for its US expansion. And the company has promised details on the New York investment by late November, about when the state's support package is expected.
