Samsung and SK Hynix push ahead with advanced NAND production in China to counter local competition and meet surging AI demand.
Samsung Electronics and SK Hynix are upgrading their manufacturing facilities in China to produce more advanced memory chips, according to industry sources. The moves aim to fend off fierce competition from rapidly growing domestic rivals like Yangtze Memory Technologies Co (YMTC) while capitalizing on booming global demand for artificial intelligence hardware.
Investing in Chinese operations has become increasingly complex for the South Korean chipmakers following the introduction of US export controls on specialized semiconductor equipment in 2022. Both firms must secure annual licences from Washington to install American-made machinery, such as etching equipment. Although the US Commerce Department’s Bureau of Industry and Security indicated in 2025 that it did not intend to authorise technology upgrades or capacity expansions at foreign-owned plants in China, both companies confirmed they are pursuing upgrades in close coordination with US authorities.
The regulatory hurdles have restricted plant refitting efforts, allowing YMTC to make significant market gains. YMTC captured 38.5 per cent of China’s NAND market in the second quarter of 2026—up from 28 per cent in 2025—overtaking Samsung, whose share fell to 33.5 per cent. SK Hynix’s share also declined to 17 per cent. YMTC currently produces 160- and 232-layer NAND chips, with small volumes of 294-layer models and plans for 300-plus-layer products.
To regain competitiveness, Samsung and SK Hynix are transitioning their Chinese sites toward manufacturing flash NAND memory chips with over 200 layers. NAND chips, which retain data without power, are vital components in smartphones, PCs, and high-density solid-state drives for AI data centres. Higher layer counts enable greater storage density and lower unit costs.
At its Xian facility—which accounts for roughly 40 per cent of its global NAND output—Samsung is executing an internal project code-named “Monami” to convert lines to manufacture 286-layer V9 NAND chips. The company aims for a monthly output of 5,000 wafers by December 2026, scaling up to 40,000 wafers per month by December 2027. Samsung stressed that the upgrade complies with US trade rules, clarifying that it serves growing demand from global customers without expanding overall physical footprint or building new facilities.
Similarly, SK Hynix plans to transition its Dalian factory from 192-layer production to chips with 240 layers or more. The Dalian site was acquired from Intel in 2021 and operates under Solidigm, which is preparing for an initial public offering in the US. Sources indicate SK Hynix is authorised to produce up to 240-layer chips at Dalian and may seek US approval for research on 300-plus-layer technology, alongside ongoing discussions with the US administration regarding plans for a new NAND factory on American soil.
