SK Hynix's New York Chip Plans Stall as US Holds Back Licences for Its China Plant

The company has argued that producing more at Dalian would generate the revenue it needs to fund its planned expansion in the United States. According to the report, the Commerce Department has not signed off on the new licences, and the people said that approval for the Dalian expansion is central to what happens in New York.

Solidigm, SK Hynix's US subsidiary, plans to invest about $45 billion in two NAND flash memory plants in Marcy, New York, Reuters said, and investment could eventually reach about $100 billion. NAND keeps data stored without power and is widely used for storage in data centres, where demand has risen with the build-out of AI infrastructure.

Talks Continue in Washington

Solidigm executives have met Commerce Department officials nearly 10 times since late August, according to Reuters. Commerce Under Secretary Jeffrey Kessler has reportedly held to the position that the United States will not allow more American tools to be used to upgrade or expand capacity in China. The department has not formally rejected a licence to equip empty clean-room space at Dalian, the report said, and a separate licence covering equipment to maintain the Dalian facility in 2027 is also being negotiated.

Solidigm said in a statement that it is looking at potential locations around the world for a NAND fab. "No decision regarding any specific course of action has been made," the company said. SK Hynix, the Commerce Department and the White House did not immediately respond to requests for comment, Reuters said.

Leland Miller, a member of the US-China Economic and Security Review Commission, told Reuters: "Ultimately, none of this is going to go forward without a green light from the White House."

Why It Matters

The case shows two US policy goals pulling against each other. The Trump administration is trying to keep advanced chipmaking technology away from China while also pressing foreign chipmakers to build factories in the United States. Reuters described the negotiations as a test of how far Washington will relax national security restrictions to win foreign chip investment.

For the AI supply chain, the outcome matters beyond one company. Memory has become one of the tightest parts of the market. This week, reports said memory chip prices had doubled as manufacturers prioritised data centre customers. A delay to one of the largest planned NAND investments in the United States would affect where future storage capacity for AI data centres is built, and how quickly.

The report also comes at a sensitive time for Korean chipmakers. South Korea's KOSPI fell 3.6 per cent on Wednesday as worries about AI funding hit Samsung and SK Hynix shares. Investors are also weighing how a Democratic-controlled US Congress would approach technology and trade policy from January.

The sources did not say when a decision on the Dalian licences might come.