Stalled U.S. export licenses for SK Hynix’s memory chip operations in China are complicating the South Korean firm’s plans to build massive new NAND facilities in New York.
- SK Hynix’s U.S. subsidiary, Solidigm, is planning a massive investment to construct two NAND memory-chip plants in Marcy, New York.
- The expansion hinges on U.S. export approvals to upgrade and expand production at the company’s Dalian facility in China.
- Commerce Department officials, including Under Secretary Jeffrey Kessler, have resisted allowing further American chipmaking tools to be used, creating a high-stakes policy dilemma for the administration over national security safeguards versus foreign investment.
South Korean chipmaker SK Hynix (SKHY) is facing a major roadblock in its domestic expansion as its U.S.-headquartered subsidiary, Solidigm’s plan to build a memory chip factory in the US has hit regulatory hurdles, Reuters reported.
Solidigm has plans to invest upwards of $45 billion to establish two NAND memory-chip facilities in Marcy, New York. Over time, these investments could ultimately swell to roughly $100 billion. NAND memory, which is crucial for data storage in data centers, retains information even when the power is shut off.
U.S. officials have held up approval for American chipmaking equipment needed by SK to expand production in China, Reuters reported.
The multi-billion-dollar New York project is heavily dependent on cash flow generated from SK Hynix’s manufacturing plant in Dalian, China. Company representatives maintain that ramping up production and introducing advanced chipmaking technology in China is essential to remaining competitive and funding the massive U.S. infrastructure layout.
SKHY stock gained about 2% on Tuesday.
Clash Over Export Controls And National Security
Solidigm executives have held nearly 10 meetings with U.S. Department of Commerce officials since late August to negotiate terms. During a session, Commerce Under Secretary Jeffrey Kessler maintained that Washington would not permit additional American semiconductor tools to expand or upgrade capacity in China.
Nevertheless, the department has yet to formally reject a license application aimed at outfitting vacant cleanroom space in Dalian with American equipment. Both sides are concurrently discussing a separate 2027 licensing agreement for routine equipment maintenance at the facility.
Leland Miller, a member of the bipartisan U.S.-China Economic and Security Review Commission established by Congress, emphasized the gravity of the political choice, stating that the project ultimately cannot proceed without a direct endorsement from the White House.
Neither the White House nor the Department of Commerce immediately responded to Reuters’ requests for comment.
Solidigm noted that as a U.S.-founded entity, it routinely reviews strategic options globally to enhance competitiveness and serve clients, adding that no definitive choice regarding any specific project location has been locked in yet.
SKHY Stock: Retail View
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SKHY stock has gained about 0.8% since its July listing.
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