Samsung, SK Hynix Pursue China NAND Chip Upgrades
Samsung Electronics and SK Hynix are upgrading their Chinese manufacturing facilities to produce more advanced NAND memory chips, as demand from AI infrastructure grows and domestic rival YMTC gains market share. The China NAND chip upgrades are proceeding under US regulatory constraints, which limit the equipment and technology that foreign chipmakers can bring into the country.
Samsung confirmed that work was underway and said it was consulting closely with US authorities. SK Hynix also confirmed equipment installation at its Dalian facility. However, neither company disclosed all the production details, and it remains unclear how much of the required equipment has received US export approval.
The plans highlight the challenge facing South Korean memory manufacturers as they seek to modernise existing Chinese operations without breaching restrictions on semiconductor technology exports.
China NAND Chip Upgrades Target More Advanced Memory
Samsung is converting its Xi'an plant in northwestern China to produce 286-layer V9 NAND chips, according to people familiar with the plans. The facility currently manufactures chips with around 200 layers and accounts for a significant share of Samsung's global NAND output.
One reported target is monthly production of 5,000 wafers by December 2026, rising to 40,000 by December 2027. Samsung said the upgrade is intended to meet growing customer demand, including in the United States, and does not involve expanding production capacity or constructing a new facility.
SK Hynix is pursuing a transition at its Dalian plant from 192-layer NAND products to chips with 240 layers or more. The company acquired the facility through its purchase of Intel's NAND business in 2021. Some of the reported production plans remain based on sources familiar with the matter.
NAND flash memory retains data without power and is used in smartphones, personal computers and solid-state drives. More layers can increase storage density, making advanced NAND important for data-intensive applications, including AI data centres.
US Export Controls Complicate Factory Upgrades
The companies must navigate US restrictions introduced in 2022 on semiconductor manufacturing equipment supplied to China. They are required to obtain annual licences for certain US-made tools, including equipment used in chip fabrication.
The US Commerce Department's Bureau of Industry and Security said in 2025 that it did not intend to grant licences for technology upgrades or capacity expansion at the companies' existing Chinese plants. It has indicated that licences may be granted to keep existing facilities operating.
Samsung says its upgrade complies with US export regulations. SK Hynix has also said it is installing equipment in consultation with the US government. However, the extent of approvals for the equipment required by the reported plans has not been established.
These restrictions complicate decisions about how much to invest in Chinese facilities, particularly when manufacturers need to improve production processes to remain competitive.
YMTC Intensifies Competition in China's Memory Market
The upgrades come as Yangtze Memory Technologies Co. (YMTC) expands its position in China's NAND market. Research firm Omdia estimated that YMTC held 38.5% of the market in the second quarter of 2026, compared with Samsung at 33.5% and SK Hynix at 17%.
YMTC produces NAND chips with up to 294 layers in limited quantities and is pursuing more advanced products. Its progress puts additional pressure on established manufacturers to improve performance and cost efficiency.
For Samsung and SK Hynix, the immediate challenge is to advance their Chinese production while complying with export restrictions. The reported upgrades could help them offer denser memory products, but their scope and timing depend partly on regulatory approvals.
The outcome will influence how the two companies balance their Chinese manufacturing operations with investment in other locations. For now, the plans represent efforts to modernise existing facilities, not confirmation of new production capacity or unrestricted access to advanced chipmaking equipment.
