Samsung, SK Hynix to Upgrade Chinese Chip Plants

Samsung Electronics and SK Hynix are set to upgrade their China factories to produce more advanced memory chips, aiming to fend off competition from a fast-growing Chinese rival and meet huge AI demand. 

The main question for the South Korean semiconductor giants is how much to invest, as the US imposed export controls on some chip-making equipment in 2022 to slow China’s technological progress.

Ever since the implementation of export controls, both companies are now required to have a US license annually if they want to install US-made equipment like etching machines in China. In 2025, the US Commerce Department’s Bureau of Industry and Security said they don’t intend to grant licenses to upgrade technology and expand capacity at the foreign chipmakers’ factories in China. 

SK Hynix said it has been installing equipment at its Dalian factory in northeastern China, in consultation with the US government. Neither firm disclosed details of the production plans. 

The companies are working to manufacture flash NAND memory chips with more than 200 layers at their Chinese plants, whose products are currently not as advanced as chips being produced in South Korea. 

The company plans to gradually increase production by December 2027 while following US rules. After this news, shares of both companies rose by 6%.

The US government said it would let the South Korean chipmakers run their China factories without upgrading technology. Meanwhile, China’s Yangtze Memory Technologies Co. (YMTC) grew quickly and overtook Samsung to take the top spot in China’s memory market, now making chips with up to 294 layers and planning even more.