Samsung Electronics and SK Hynix are upgrading their semiconductor facilities in China to produce more advanced NAND memory chips, according to people familiar with the plans.
The upgrades are aimed at helping the South Korean chipmakers compete with China’s Yangtze Memory Technologies Co (YMTC) as artificial intelligence drives stronger global demand for memory products.
But modernising their Chinese operations has become more difficult since the United States imposed restrictions on exports of advanced chipmaking equipment to China in 2022.
The rules require Samsung and SK Hynix to obtain US approval before installing certain American-made equipment at their Chinese facilities.
In 2025, the US Commerce Department’s Bureau of Industry and Security indicated that it would not approve applications to expand production capacity or upgrade technology at the companies’ existing Chinese plants.
Samsung and SK Hynix told Reuters that upgrade work is underway and is being carried out in consultation with US authorities.
Neither company disclosed details of its production plans, while Reuters could not establish the extent to which Washington has approved the export licences required for the projects.
Four people familiar with the plans said both companies are preparing to produce NAND flash memory chips with more than 200 layers at their Chinese plants, bringing them closer to technology already used at their facilities in South Korea.
NAND is non-volatile memory that retains data even when a device is switched off. It is widely used in smartphones, computers and solid-state drives, including systems supporting AI data centres.
More layers allow manufacturers to increase storage capacity while lowering the cost per unit of storage.
Samsung’s Xi’an facility in northwestern China currently produces NAND chips with around 200 layers and accounts for about 40 per cent of the company’s global NAND production, according to two people familiar with the operation.
Samsung is carrying out an internal project known as “Monami”, a French expression meaning “my friend”, to modify the plant for production of its 286-layer V9 NAND chips.
Monthly production is expected to reach 5,000 wafers in December 2026 before rising to 40,000 wafers by December 2027, one person familiar with the plans said.
Samsung said the programme complies with US export requirements and is intended to meet growing demand from customers worldwide, including in the United States.
The company said the project does not involve expanding production capacity or constructing additional manufacturing facilities.
SK Hynix is preparing to produce NAND chips with at least 240 layers at its Dalian facility in northeastern China, according to three people familiar with the plans.
The plant currently produces 192-layer NAND chips, one of the sources said.
SK Hynix acquired the facility through its $9 billion purchase of Intel’s NAND business in 2021. The site remains the only NAND manufacturing facility operated by the business, now known as Solidigm, which is preparing for an initial public offering in the United States.
One source said SK Hynix has approval to manufacture chips with up to 240 layers at Dalian.
The company could also seek US approval to conduct research and development on NAND chips with more than 300 layers at the facility, potentially supporting future manufacturing operations in the United States.
SK Hynix is also negotiating with the Trump administration over plans for a new NAND production facility in the US.
The upgrades come as YMTC continues to gain ground in China’s NAND market.
Research firm Omdia estimates that YMTC controlled 38.5 per cent of China’s NAND market in the second quarter, up from 28 per cent in 2025.
The increase pushed YMTC ahead of Samsung, whose market share fell to 33.5 per cent from 36 per cent. SK Hynix’s share also declined, dropping to 17 per cent from 20 per cent.
YMTC’s product range is largely made up of 160-layer and 232-layer NAND chips, although it also produces a limited quantity of 294-layer products.
Two people familiar with the company’s operations said YMTC is preparing to manufacture NAND chips with more than 300 layers.
YMTC did not immediately respond to Reuters’ request for comment.
The US Bureau of Industry and Security did not directly respond to Reuters’ questions about the status of licences for Samsung and SK Hynix.
The agency referred instead to its 2025 policy statement, which said applications allowing the companies to continue operating their existing Chinese facilities would be considered, while requests involving capacity expansion or technological upgrades would not be approved.
Outside China, Samsung currently markets NAND chips with up to 286 layers and unveiled a prototype featuring more than 400 layers in August.
Goodness Anunobi
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