The U.S. government has delayed the export approval for American-made semiconductor manufacturing equipment needed for SK Hynix's factory expansion in China, causing setbacks for the company's plans to build a new semiconductor plant in New York.
According to Reuters, citing sources, SK Hynix requested export approval from the U.S. Department of Commerce to bring American-made semiconductor manufacturing equipment into its factory in Dalian, China, but has yet to receive approval.
SK Hynix aims to increase production at its Dalian facility to generate funds necessary for its investments in the U.S. The company's American subsidiary, Solidigm, plans to invest approximately $45 billion (about 60.5 trillion won) to construct two NAND flash production plants in Marcy, New York. Sources indicate that the investment could eventually expand to $100 billion.
To facilitate this, Solidigm executives have been negotiating with the U.S. Department of Commerce, meeting about ten times since late August.
However, during a meeting last week, Jeffrey Kessler, Deputy Assistant Secretary of Commerce, reportedly maintained the department's stance against allowing additional imports of American semiconductor equipment for expanding production capacity or upgrading facilities in China.
Nonetheless, the two sides are separately negotiating export approvals for equipment necessary to maintain operations at the Dalian factory in 2027, sources said.
Reuters analyzed that these negotiations illustrate a policy dilemma for the U.S. regarding how much it can relax national security regulations, initially established by the Trump administration to prevent American technology from bolstering China's military capabilities, in order to attract foreign investment and expand domestic semiconductor production facilities.
Rieland Miller, a commissioner with the U.S.-China Economic and Security Review Commission, stated, "Ultimately, without the White House's approval, none of these plans can proceed."
The U.S. initially allowed the supply of American equipment to foreign semiconductor factories in China but revoked existing approvals last year, transitioning to an annual export permit system. At that time, the Department of Commerce announced it would not grant permits for technology upgrades or capacity expansions at Chinese factories.
* This article has been translated by AI.
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