U.S. Export Restrictions Complicate SK Hynix Expansion

SK Hynix’s plans to expand its semiconductor manufacturing presence in the United States have encountered delays as U.S. officials hold up export licenses for American chipmaking equipment intended for its facility in Dalian, China, according to people familiar with the matter.

The South Korean chipmaker is seeking permission to install additional equipment at the Chinese facility, arguing that increased production would help generate the revenue needed to finance its planned U.S. expansion.

The Commerce Department has not formally denied the licenses, but approval remains unresolved. The negotiations have become central to the company’s proposed investment strategy.

Solidigm Plans Major NAND Manufacturing Investment

SK Hynix’s U.S. subsidiary, Solidigm, is planning to invest more than $45 billion in two NAND manufacturing plants in Marcy, New York, according to two people familiar with the matter. The investment could potentially reach approximately $100 billion over time.

NAND memory retains data even when power is switched off and is widely used in storage applications, including data centers.

The proposed investment would represent a substantial expansion of semiconductor manufacturing in the United States. However, Solidigm’s plans remain under consideration rather than finalized.

In a statement, the company said it was exploring options for building a NAND memory fabrication facility at potential locations around the world. It emphasized that no decision regarding a specific course of action had been made.

Commerce Department Negotiations Continue

Solidigm executives have held nearly 10 meetings with Commerce Department officials since late August as the company works to secure the necessary export permissions.

During a meeting last week, Commerce Under Secretary Jeffrey Kessler maintained the department’s position against allowing additional American chipmaking equipment to upgrade or expand production capacity in Dalian, according to one person familiar with the discussions.

However, the department has not formally rejected a license application covering equipment intended to fill existing cleanroom space at the facility.

The two sides are also negotiating a separate license for 2027 that would allow the Dalian operation to maintain its production activities.

At an earlier meeting in late August, Solidigm co-CEO Richard Chin and other executives met with Commerce Secretary Howard Lutnick and Kessler. The officials reportedly expressed interest in the potential U.S. investment and willingness to work toward a resolution.

Solidigm has since prepared multiple versions of its license applications in consultation with the department.

U.S. Policy Dilemma: National Security Versus Semiconductor Investment

The negotiations illustrate the challenge facing the Trump administration as it seeks to attract foreign semiconductor investment while maintaining restrictions designed to prevent U.S. technology from supporting China’s military capabilities.

Leland Miller, a member of the U.S.-China Economic and Security Review Commission, said the proposed developments would ultimately require approval from the White House.

The issue is particularly significant because the company argues that expanding production in China would help finance its manufacturing plans in the United States.

The Commerce Department’s restrictions reflect a broader shift in U.S. export policy. Foreign-owned semiconductor facilities in China initially received exemptions from certain restrictions. However, the Commerce Department revoked those authorizations last year and replaced them with annual licenses that impose limits on the equipment and technology suppliers can provide.

In a 2025 statement, the department said it did not intend to issue licenses for upgrading technology or expanding production capacity.

SK Hynix has argued that installing equipment in previously constructed cleanroom space at Dalian would not constitute a capacity expansion because the cleanroom was built in 2023.

New York Officials Await Federal Decision

Local officials in Oneida County, where the proposed facilities would be located, remain hopeful that the negotiations will produce an answer soon.

County Executive Anthony Picente said he hoped a decision would arrive within the next couple of weeks. He also highlighted the approaching expiration of a federal investment tax credit at the end of the year.

Meanwhile, SK Hynix disclosed in October that Solidigm had suspended its review of potential initial public offering options because of market conditions and share-price trends. The company had explored an IPO as a possible way to finance U.S. production facilities and respond to growing memory demand.

SK Hynix acquired Intel’s NAND factory in Dalian in a $9 billion transaction agreed in 2020, taking control of the facility and its solid-state drive storage business shortly before the United States introduced sweeping export controls affecting advanced chip factories in China.

What Investors Should Watch Next

The immediate focus is whether the Commerce Department and the White House approve the requested licenses and whether negotiations can produce terms that satisfy U.S. export restrictions.

The timing is also important for the proposed New York investment, particularly given the approaching expiration of the federal investment tax credit. Any resolution could influence Solidigm’s manufacturing strategy, funding options and longer-term capacity plans.

For investors, the outcome will provide insight into how U.S. semiconductor policy balances domestic manufacturing ambitions with restrictions on advanced technology exports to China.