Samsung Electronics and SK Hynix are upgrading major semiconductor plants in China to manufacture more advanced NAND memory, testing how far foreign chipmakers can modernize Chinese operations under U.S. technology restrictions.
Samsung is preparing its Xi’an factory to produce 286-layer V9 NAND, replacing technology with roughly 200 layers currently manufactured at the facility.
The project is targeting approximately 5,000 wafers of monthly output by December 2026 and as many as 40,000 per month by December 2027, according to people familiar with the plans.
Xi’an is strategically important because it accounts for roughly 40% of Samsung’s global NAND production.
SK Hynix is separately moving its Dalian operations toward NAND products with at least 240 layers, compared with approximately 192-layer technology currently produced there.
The company could eventually seek U.S. approval for research involving products exceeding 300 layers.
Both companies say they are consulting closely with U.S. authorities.
That matters because Washington restricts exports of advanced semiconductor-manufacturing equipment to China, requiring the South Korean companies to seek licenses for certain U.S.-made equipment used at their Chinese factories.
The commercial pressure is also increasing.
Chinese NAND producer YMTC has expanded rapidly and increased its position in China’s memory market while developing increasingly advanced products.
Artificial-intelligence infrastructure is simultaneously increasing demand for high-capacity storage as servers process and retain enormous datasets.
More NAND layers generally allow manufacturers to increase storage density while reducing production costs per unit of memory.
The result is an unusual competitive triangle: Samsung and SK Hynix need to modernize important Chinese factories, Chinese competitors are becoming stronger, and Washington retains significant control over access to advanced manufacturing equipment.
Investors should watch U.S. licensing decisions, Samsung’s Xi’an conversion and whether SK Hynix receives permission to pursue more advanced technology at its Dalian operation.
