South Korean memory chipmakers face a year-end deadline to secure new US licenses for shipping advanced American equipment to their Chinese factories, after the Trump administration revoked blanket permits last year. SK hynix, the world's second-largest memory chipmaker, holds a one-year license for its NAND flash plant in Dalian, a port city in northeastern China, which expires on December 31. Reuters reported exclusively that the US Commerce Department has not yet issued an authorization for 2027, and that Solidigm, SK hynix's US-based flash memory subsidiary, is seeking approval to ship additional equipment to Dalian as part of a broader plan to build a new NAND factory in the United States.
SK hynix confirmed to Reuters that it plans to install equipment in the unused Mod B section of the Dalian plant, in consultation with US authorities and with necessary government approvals. The company stressed that this does not constitute an expansion of production capacity. However, the move is widely seen as a bargaining chip in negotiations with Washington, which has been pushing both SK hynix and Samsung to increase their US manufacturing footprint.
US investments as leverage
Since President Donald Trump took office in January 2025, both South Korean firms have significantly increased their commitments in the United States. SK hynix broke ground in August 2026 on a US$4 billion high-bandwidth memory (HBM) packaging plant in Indiana, with mass production slated for the second half of 2029. Its California-based subsidiary Solidigm has been reported to be considering a NAND factory in upstate New York, and SK hynix is also in talks with Intel to produce memory chips in Ohio. Samsung, meanwhile, signed a US$16.5 billion deal in July 2025 to make AI chips for Tesla, and its first chip factory in Taylor, Texas, is due to be fully operational by the end of 2026, with foundation work on a second Taylor factory largely complete.
Chinese commentators have framed the situation differently, praising SK hynix for testing the Trump administration's resolve. Xiao Song, a Shandong-based columnist, noted that Samsung and SK hynix previously held validated end-user (VEU) status at their China plants, which exempted them from individual licenses. "Now they need to renew their import licenses annually, and Washington only approves tools that keep existing plants running, not those for expansion or upgrades," she said. She added that SK hynix has created bargaining chips for itself: "If Washington wants it to build a plant in America, it wants equipment installed in Dalian first. This is not a refusal to invest in the US but a way to turn that investment into a deal."
The Trump administration has urged both companies to expand production in the US, but it is now hesitating because allowing SK hynix to expand its Dalian factory would represent a compromise of its export controls. SK hynix is leveraging the AI-driven memory boom to strengthen its negotiating position, turning its US investments into a bargaining chip with Washington.
"The global chip supply chain has long been tightly intertwined, so it cannot be cut cleanly. Washington's wish to bring manufacturing back home is obvious, but companies are not charities and they have to make money," said a Sichuan-based writer using the pen name "Scientific Explorer." He pointed out that a new plant in the US takes at least three to five years to reach production, and in the meantime, supply cannot stop and customers cannot be lost. "Expanding the Dalian plant is the right choice," he argued.
However, he cautioned that the public should not rush to take sides, as the negotiation seems to have just started. It remains unclear whether SK hynix can secure its 2027 permits by year's end.
Background of export controls
The current situation stems from a series of policy shifts. In October 2022, the Biden administration banned exports to China of machines that can make NAND chips with 128 or more layers, unless a license was granted. SK hynix and Samsung received one-year waivers, and in October 2023, the Commerce Department granted them VEU status, making the waivers indefinite. In late August 2025, the Trump administration announced it would revoke that status at the end of the year, calling it a "Biden-era loophole" that failed to attract US investment. On December 30, 2025, it granted the two firms annual licenses to ship American chipmaking tools to their Chinese factories throughout 2026.
The Dalian plant is the world's only facility producing the 192-layer floating-gate 3D NAND used in Solidigm's solid-state drives (SSDs) for AI, enterprise, and hyperscale data centers. Its Mod B building, completed in 2023 but never fully equipped due to a memory slump, can start production as soon as the American tools arrive. In contrast, a new factory in the US would take three to five years to go from planning to production. The gap matters because NAND prices have jumped about 700% since mid-2023, and AI data centers are driving a global memory chip shortage. Operating costs in China are also lower than in South Korea, making it cheaper and quicker to add output in Dalian than to build from scratch elsewhere.
Beijing is watching the negotiations closely, hoping for a deal that would allow SK hynix to continue operating its Chinese plant without disruption. The outcome will have significant implications for the global memory chip supply chain and for US-China technology competition. As the year-end deadline approaches, all eyes are on Washington's decision.
