SK hynix reportedly playing hardball with Trump admin over 3D NAND fab

SK hynix is reportedly proposing to build a new 3D NAND manufacturing facility in the United States. In return, it wants the U.S. government to approve additional shipments of semiconductor manufacturing equipment to Solidigm’s Dalian facility in China. The arrangement would connect a new American fab with continued operation and development in China.

Solidigm has requested licenses for more tools, including equipment from Applied Materials, KLA, and Lam Research. The Dalian site has unused space in its Mod B building, completed in 2023. SK hynix wants to install tools there without technically expanding the building’s capacity.

The proposal could help the Trump administration attract semiconductor manufacturing to America. It could also give Solidigm more production and revenue in China. The company may use those profits to finance the U.S. fab and support operations before domestic capacity becomes available. An IPO as early as 2027 is also under consideration.

A 3D NAND fab is a factory that manufactures NAND flash memory by building memory cells in vertically stacked layers. The three-dimensional structure allows manufacturers to place more storage in a compact chip. NAND flash is nonvolatile memory, so it retains data when power is removed. It is widely used in solid-state drives, including the data-center SSDs made by Solidigm.

The article identifies Dalian as the world’s only facility producing 192-layer floating-gate 3D NAND for Solidigm’s data-center products. Those SSDs serve AI, enterprise, and hyperscale data centers. Solidigm has also discussed developing fifth- and sixth-generation floating-gate NAND beyond its current 192-layer technology.

Other companies may produce NAND with more than 200 layers, but layer count alone does not describe every product’s design or business role. Dalian matters because it supplies Solidigm’s particular floating-gate NAND and supports its specialized SSD lineup.

Dalian is especially important because it makes the specific NAND technology used in Solidigm’s data-center-grade SSDs. The article calls it the world’s only facility producing 192-layer floating-gate 3D NAND for Solidigm. These drives target AI, enterprise, and hyperscale data centers. That makes the site strategically important even if other manufacturers have reached higher layer counts with different NAND designs.

The key distinction is product specialization, not a simple layer-count contest. Solidigm has committed to developing floating-gate NAND and plans fifth- and sixth-generation versions beyond its current 192-layer technology. Dalian is therefore the manufacturing base for an important product family and technology path.

The facility also has unused room in its Mod B building. Solidigm sells every SSD it produces, according to the article. More equipment could therefore turn available factory space into additional output, sales, and revenue while supporting the company’s longer-term U.S. manufacturing plans.

The article does not provide a precise figure for Dalian Mod B’s unused capacity. It says the building, completed in 2023, was never fully equipped. Some production tools are installed, but substantial space remains available for additional equipment. The unused capacity is therefore described qualitatively, not as a number of wafers, chips, or SSDs.

The reason for the empty space is the memory-market downturn that existed when the building was completed. Solidigm delayed fully equipping it. Because the structure already exists, installing tools there would not constitute a capacity expansion under the reported policy interpretation. That distinction could help the company seek approval for more equipment.

Adding tools would let Solidigm produce more NAND and assemble more data-center SSDs. The article says the company sells every SSD it produces, so unused capacity represents lost revenue. Greater output could generate profits to help finance a proposed U.S. fab and sustain operations until domestic production begins.

Semiconductor export controls are government restrictions on sending certain chipmaking equipment, software, or technology to another country. A license is official permission for a specific shipment. The article says equipment from Applied Materials, KLA, and Lam Research is subject to U.S. licensing requirements before it can go to Dalian in China.

The controls reflect U.S. concerns about expanding semiconductor capacity in China and introducing new manufacturing technologies there. Authorities sometimes approve shipments to multinational companies such as SK hynix or Samsung, but mainly to keep existing facilities operating. They do not generally want those fabs to expand or adopt newer processes.

SK hynix received limited authorization for Dalian equipment deliveries in 2026, but not yet for 2027, according to Reuters. Solidigm has requested additional licenses. The proposed U.S. fab may be intended to persuade officials that allowing more Chinese tools would also produce a manufacturing commitment on American soil.

If the shipments are approved, Solidigm could install more tools in Dalian Mod B and increase production of its floating-gate NAND. Because it sells every SSD it makes, additional output could raise revenue and profits. Those profits could help finance the proposed U.S. fab and support Solidigm until American production becomes available.

Approval would also allow more equipment into China, potentially increasing production capacity there. That conflicts with the policy described in the article, which favors keeping existing multinational fabs running but opposes capacity expansion or new technologies in China. The U.S. government could therefore treat the proposed American fab as compensation for permitting more Dalian tools.

If approval is denied, unused Dalian space may continue generating no revenue, and Solidigm could have less cash for a U.S. fab. China would not receive the additional tools or related production increase. The article does not state that denial would stop existing Dalian operations, only that requested future shipments remain unauthorized.

Memory manufacturing depends on specialized equipment because chips require many precise production steps. A fab also demands enormous upfront investment in buildings, tools, and process development. Those costs must be spread across a large volume of working products. If equipment sits idle, the company still carries the investment without earning corresponding revenue.

The Dalian example makes the mechanism clear. Solidigm completed Mod B in 2023 but left substantial space unequipped after a memory-market downturn. The article says the company sells every SSD it produces, so unused capacity means missed sales. Installing more tools could convert existing space into production without rebuilding the facility.

High utilization matters because additional output can improve revenue and help fund future investment. It also supports development of later floating-gate NAND generations. However, adding equipment may require government approval when the fab is in China. That makes factory economics depend partly on export policy as well as technology and demand.