SK Hynix Considers US NAND Factory as Trump Pushes Korean Chipmakers to Reshore Production
SK Hynix subsidiary Solidigm is considering building a NAND flash memory factory in the United States, with upstate New York emerging as a leading candidate, as pressure from the Trump administration pushes South Korean chipmakers to expand semiconductor production on American soil.
Three people familiar with the matter told Reuters that Solidigm is evaluating the potential project, which would be separate from discussions between SK Hynix and Intel over producing memory chips at Intel’s Ohio facility.
No final investment decision has been made, and key details of the proposed plant remain under discussion, one of the sources cautioned.
SK Hynix confirmed that Solidigm is examining options but said there was no specific project yet.
“Subsidiary Solidigm is reviewing various options to strengthen its business competitiveness, but no specific plans have been confirmed at this time,” SK Hynix said.
A U.S. manufacturing base would give Solidigm an alternative to its sole NAND production facility in Dalian, China. It could also reduce the company’s exposure to potential U.S. tariffs and restrictions on the export of semiconductor manufacturing equipment to China.
The potential investment comes as Washington intensifies efforts to bring semiconductor production back to the United States, particularly as the rapid expansion of AI data centers tightens global supplies of memory chips.
For SK Hynix, however, building in America presents a difficult cost calculation. Semiconductor production is generally more expensive in the United States than in South Korea, while Seoul and Washington are still negotiating the terms of South Korea’s broader investment commitments and trade relationship with the United States.
Solidigm Could Offer a Lower-Risk US Expansion
Solidigm’s NAND business is expected to provide SK Hynix with a politically easier path into U.S. manufacturing than relocating its most advanced memory technologies.
One of the sources said producing NAND through the U.S. subsidiary could encounter less resistance from Seoul because NAND is viewed as less strategically sensitive than advanced DRAM products, particularly high-bandwidth memory, or HBM, which has become a critical component of AI accelerators.
That has become a matter of interest as Washington and Seoul compete for semiconductor investment.
The South Korean government has been encouraging SK Hynix and Samsung to accelerate plans for a semiconductor manufacturing cluster in the country’s southwest, potentially involving investments worth hundreds of billions of dollars. At the same time, the Trump administration has been pressing Korean and Taiwanese semiconductor companies to expand U.S. manufacturing.
U.S. Commerce Secretary Howard Lutnick has threatened tariffs of up to 100% on South Korean and Taiwanese companies unless they commit to increasing production in the United States.
The pressure puts SK Hynix in the middle of competing industrial policies. Washington wants more chip manufacturing on American soil, while Seoul wants to preserve South Korea’s position as a global semiconductor manufacturing hub.
South Korean President Lee Jae Myung said Seoul would seek to “protect South Korea’s national interests while respecting the views of companies” when asked about pressure on Korean chipmakers to establish factories in the United States.
“It remains a matter of controversy,” Lee said Friday, without elaborating.
The issue is particularly sensitive because South Korea has already committed to a $350 billion investment package in the United States as part of an agreement aimed at securing lower U.S. tariffs.
China Is Expanding Its Memory Ambitions
The potential Solidigm investment also comes as Chinese semiconductor companies are moving deeper into the memory market.
Chinese chipmaker CXMT plans to establish an R&D production line for NAND flash memory at a new facility in Beijing, according to a Reuters report, as it seeks to enter a market dominated by Samsung, SK Hynix and Micron.
China’s push adds another layer of pressure on SK Hynix.
A U.S. plant could help Solidigm diversify its manufacturing footprint while providing some protection against geopolitical restrictions. But building capacity in America would take years and require substantial capital, making it difficult to know what the market will look like when the factory begins production.
That uncertainty is relevant for NAND, a market that has experienced prolonged cycles of oversupply, falling prices and weak profitability.
SK Hynix acquired Solidigm from Intel for $9 billion in 2020 and has since dealt with years of losses at the business following the extended downturn in NAND. The company is now looking for ways to improve Solidigm’s competitiveness. Last month, SK Hynix said it was considering measures to strengthen the unit after reports that Solidigm was exploring a pre-IPO fundraising of about 5 trillion won, or roughly $3.6 billion.
SK Hynix said at the time that no decisions had been made.
A U.S. factory could therefore serve several purposes at once: diversifying Solidigm’s manufacturing base, reducing its exposure to China-related trade restrictions, and giving SK Hynix a stronger position in the U.S. market.
But the economics remain uncertain.
Memory has become increasingly important to the AI infrastructure boom. DRAM provides the working memory used by processors, while NAND is primarily used to store data. The rapid construction of AI data centers has sharply increased demand for memory and put pressure on global supply chains.
SK Hynix has benefited heavily from the surge in demand for HBM, which is used alongside AI processors. That business is different from Solidigm’s NAND operation, but the broader AI infrastructure boom has created a more favorable environment for memory manufacturers.
However, there is concern about demand remaining strong enough to justify new U.S. capacity several years from now. The debate has become more complicated after concerns emerged over the pace of frontier AI development. Any meaningful slowdown in AI infrastructure investment could eventually affect demand for the memory and storage components used in data centers.
SK Hynix’s shares nevertheless rose 6.4% on Friday, compared with a 2.7% gain in the benchmark KOSPI index, as investors responded to broader semiconductor developments.
Like this:
Loading…
