Samsung, SK Hynix upgrade China plants for advanced NAND

Samsung Electronics and SK Hynix ↗ 5.53% are upgrading their factories in China to make NAND flash chips with more than 200 layers. The goal is to fend off a fast-growing Chinese rival and meet AI-driven demand, Reuters reported on Wednesday, citing four people familiar with the plans. Both companies confirmed to Reuters that the upgrades are underway and are being done in close consultation with Washington. They did not disclose production details.reuters.com

The work tests the limits of US export controls. Since 2022, the two South Korean chipmakers have needed annual US licenses to install American-made equipment in China. In 2025, the Commerce Department's Bureau of Industry and Security said it did not intend to approve upgrades to technology or added capacity at those plants, according to Reuters. Reuters said it could not determine how far US authorities have granted licenses for the equipment needed.reuters.com

Project Monami in Xian

Samsung's plant in Xian makes about 40% of the company's global NAND output and currently produces chips with roughly 200 layers. Under an internal project called "Monami," French for "my friend," Samsung is converting the plant to 286-layer V9 NAND. One source said the target is 5,000 wafers a month in December 2026, rising to 40,000 wafers by December 2027, Reuters reported. Samsung said the upgrade complies with US export rules and "is aimed at meeting growing demand from global customers, including those in the US." The company added that it "is not expanding production capacity or constructing new manufacturing facilities," as reported by CNBC.cnbc.com+1

SK Hynix is moving its Dalian site from 192-layer chips to products with 240 or more layers. One source said it is authorized to make chips with up to 240 layers there and may ask Washington for permission to do research on chips with more than 300 layers. SK Hynix bought the Dalian site with Intel's ↗ 5.49% NAND business in 2021. That business, now called Solidigm, is preparing for a US initial public offering. SK Hynix has said earlier equipment moves at Dalian were part of existing plans, carried out with US authorization, and did not add capacity, Asia Today reported.reuters.com+1

YMTC takes the lead

The upgrades come as Yangtze Memory Technologies Co. (YMTC) has overtaken Samsung in China, KED Global reported. Research firm Omdia estimates that YMTC held 38.5% of China's NAND market in the second quarter, up from 28% for all of 2025. Over the same period, Samsung's share fell from 36% to 33.5% and SK Hynix's fell from 20% to 17%. YMTC makes mostly 160- and 232-layer chips but also produces a small number of 294-layer chips, and it plans to go beyond 300 layers, according to Reuters. YMTC did not respond to Reuters' request for comment.kedglobal.com+1

The Korean firms' China exposure is large. TrendForce estimates that China accounts for about 30% to 35% of Samsung's NAND output and 40% to 45% of SK Hynix's. Outside China, Samsung sells NAND with up to 286 layers and SK Hynix sells chips with up to 321 layers. That leaves the open question of how far Washington will let the companies close the gap at their Chinese plants.trendforce.com