SK Hynix has proposed building a new factory in the United States in exchange for Washington’s approval to ship American chipmaking equipment to its plant in China, according to a Reuters report, a swap that would tie the company’s expansion on two continents into a single negotiation.
The proposal centers on Solidigm, the company’s U.S. subsidiary, and on idle space at the Dalian plant in northeastern China where the company makes NAND flash memory. That facility, known internally as Dalian Mod B, was completed in 2023, but the equipment needed to fill it was never fully installed after the memory market turned down, leaving capacity the company would now like to use.
SK Hynix is also considering taking Solidigm public in the United States as early as 2027 to raise money for the new American plant, according to the report. Approval for the additional equipment shipments it wants in 2027 has not been granted.
The arrangement would resolve a problem the company has carried since 2022, when the United States restricted exports of advanced chipmaking tools to Chinese factories on national security grounds. Korean manufacturers have operated under waivers and case-by-case approvals since then, an arrangement that has kept their Chinese plants running while leaving their future subject to periodic review.
Dalian is one of the largest NAND sites in China, and the newer building was designed to lift the company’s output of the memory used in solid-state drives, phones and data center storage. Filling it with equipment would raise supply at a moment when memory prices have moved against buyers after several years of oversupply, though SK Hynix has not said publicly how much capacity the site would add or when.
The structure of the offer will be familiar to anyone who has followed semiconductor policy. Over the past four years, governments have traded access for investment: subsidies for plants built on American and European soil, and regulatory relief for companies that commit capital to those plants. What is unusual here is that the currency being spent is American equipment for Chinese production, which is the transaction Washington’s controls were written to prevent.
Analysts said the proposal may be tested against how the United States treats memory differently from logic. The sharpest restrictions have fallen on the tools needed for leading-edge processors, where China’s largest manufacturers are the target, while memory makers have been allowed more room because their products are commodities and because the supply chain for them runs through Korea, Japan and the United States.
Solidigm gives the company something to work with. The unit was assembled from Intel’s NAND business, which SK Hynix acquired, and it holds a U.S. corporate identity, American customers and engineers in California and elsewhere. A listing in New York would give it a separate currency for the build, its own investor base and a valuation that can be argued independently of its Korean parent’s share price.
The money question is not trivial. Building NAND capacity in the United States costs considerably more than in Asia, and the industry’s returns have been brutal: prices have swung between shortages and gluts for a decade, and capital committed at the top of a cycle has a habit of arriving at the bottom of the next one. A U.S. plant also needs a customer base for its output, which at present sits mostly in Asia.
There is a competitive dimension the report does not address. China’s own memory makers have been expanding, and any increase in SK Hynix’s capacity in China would land in the same market they are trying to win. Authorities in Beijing have looked favorably on foreign investment in their domestic supply chain, and a company that keeps its Dalian site running is a company Washington has not pushed out of the country.
For SK Hynix, the trade also carries a strategic price. Capacity inside China is closer to customers and cheaper to run, but it is exposed to policy on both ends, and the company has been moving deliberately to reduce that exposure by expanding into the United States and Korea. Trading a new American plant for room in Dalian is a bet that the two markets remain connected for long enough for both investments to pay.
Similar logic is driving the rest of the industry. Samsung has built plants in Texas, foundries have spread across Arizona, Ohio and Japan, and every large manufacturer now maintains a political footprint in Washington alongside its factories in Asia. What each of them wants in return is the freedom to keep operating the older capacity where it is.
The decision now sits with the U.S. Commerce Department and the interagency process that writes the equipment rules, which has been tight-lipped about pending approvals. A yes would establish that a company can buy relief for its Chinese plants with construction in America. A no would leave SK Hynix with idle floor space in Dalian and a smaller claim on the memory market’s next upswing.
