US Restricts Equipment Sales to Samsung, SK Hynix China Facilities
WASHINGTON D.C. – The US Commerce Department is tightening restrictions on exports of semiconductor manufacturing equipment to China, specifically impacting Samsung and SK hynix’s fabrication plants there. Effective December 31, the companies will no longer be permitted to receive US-made equipment to expand or upgrade their DRAM and NAND production capabilities in China, though they can continue utilizing existing equipment.
SK hynix operates a DRAM facility in Wuxi, Jiangsu Province, and its subsidiary Solidigm manufactures 3D NAND in Dalian. The company also maintains a packaging and test facility in Chongqing.Samsung produces NAND in Xi’an, Shaanxi Province, and has a packaging and test plant in Suzhou, Jiangsu Province. Both companies rely on equipment from US suppliers including KLA Corp,Lam Research,and Applied Materials.
According to Reuters,SK hynix stated it “will maintain close interaction with both Korean and the US governments and take necessary measures to minimize the impact on our business.” Samsung has not publicly commented.approximately 40 percent of SK hynix’s overall DRAM production occurs at the Wuxi fab, while Solidigm’s NAND output from Dalian represents around a fifth of SK hynix’s total NAND capacity.
The restrictions pose significant challenges to upgrading existing Chinese facilities. Solidigm’s Dalian plant currently utilizes 192-layer NAND technology, lagging behind SK hynix’s current 238-layer and 321-layer generations. Upgrading to 200-plus and 300-plus-layer technology would require re-equipping the plant, now prohibited under the new rules. This could necessitate a new fab investment outside of China, potentially costing $10-20 billion over several years.
Samsung’s Xi’an plant produces 128-layer, 236-layer, and 286-layer 3D NAND. However, Samsung also manufactures NAND in South Korea (Hwaseong and Pyeongtaek) and is developing 400-plus-layer products. Without a licence,samsung will also face substantial costs to expand capacity or build new facilities to compensate for potential production shortfalls.
The US initially implemented restrictions on semiconductor technology exports to china in 2022, granting exemptions to Samsung, SK hynix, Micron, and TSMC. These exemptions are now being revoked for Samsung and SK hynix, while Micron and TSMC retain theirs. Micron operates US-based fabs, and TSMC is expanding plants in Arizona.
The move may be part of a broader US strategy to incentivize domestic semiconductor manufacturing.
The Department of Commerce’s official notice revokes validated end-user authorizations for these companies in China, and incorrectly identifies SK hynix’s Solidigm facility as “Intel Semiconductor (Dalian) Ltd.” – a remnant of Intel’s former NAND operation acquired by SK hynix earlier this year.
