Samsung Electronics and SK Hynix are enhancing production facilities at their Chinese plants to advance the production of cutting-edge memory semiconductors. This initiative is a response to the rapid growth of Chinese semiconductor competitor Yangtze Memory Technologies Co. (YMTC) and the surging demand for AI-related memory chips. However, U.S. export restrictions on semiconductor technology remain a significant variable in these upgrades.
According to a report by Reuters on October 21, sources indicate that Samsung and SK Hynix are working on producing NAND flash memory semiconductors with over 200 layers at their Chinese facilities.
NAND flash is a type of semiconductor that retains data even when powered off, commonly used in smartphones, PCs, and solid-state drives (SSDs). Increasing the number of memory cells stacked within the same space allows for greater data storage capacity while reducing costs.
The report states that Samsung plans to upgrade its Xi'an plant to produce 286-layer V9 NAND flash. The Xi'an facility is a key production base, accounting for about 40% of Samsung's total NAND flash output, currently producing products with around 200 layers.
SK Hynix is also pursuing plans to produce NAND flash products with over 240 layers at its facility in Dalian, northeastern China, where it currently manufactures 192-layer products.
The Dalian plant was acquired by SK Hynix in 2021 when it purchased Intel's NAND business and is now operated under its U.S. subsidiary, Solidigm.
However, the biggest obstacle to upgrading facilities in China is the U.S. export restrictions. Since 2022, the U.S. has controlled the export of certain semiconductor manufacturing equipment to China to curb its technological advancements. As a result, both companies must obtain annual approval from the U.S. government to import American-made etching equipment into their Chinese plants. Notably, the U.S. Department of Commerce has indicated that while it will grant permits for the operation of existing facilities in China, it will not approve requests for technological upgrades or capacity expansions.
Both companies have stated that the upgrades at their Chinese facilities are being conducted in close consultation with the U.S. government.
Samsung emphasized that the upgrades are compliant with U.S. export regulations and are aimed at meeting the increasing demand from customers worldwide, including the U.S., without expanding production capacity or constructing new manufacturing facilities.
According to Reuters, SK Hynix has also received approval to produce up to 240-layer products at its Dalian plant. Additionally, it is reportedly considering seeking U.S. government approval for research and development of products exceeding 300 layers at the Dalian facility.
As South Korean companies face challenges in upgrading their Chinese facilities due to U.S. regulations, YMTC has rapidly increased its market share in the local market.
Market research firm Omdia reports that YMTC's share of the Chinese NAND flash market rose from 28% in 2025 to 38.5% in the second quarter of this year. In contrast, Samsung's market share decreased from 36% to 33.5%, while SK Hynix's share fell from 20% to 17%.
YMTC primarily produces 160-layer and 232-layer products, with some 294-layer products also in production. Reuters reports that YMTC is planning to produce products exceeding 300 layers in the future.
* This article has been translated by AI.
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