Report: SK Hynix (SKHY.US) Subsidiary Solidigm Reportedly Considers Building NAND Plant in the US, Cost and Political Obstacles Remain

Three people familiar with the matter said that Solidigm, a subsidiary of South Korean memory chip giant SK Hynix (SKHY.US), is considering building a NAND flash chip plant in the United States, with upstate New York emerging as a leading candidate location. The move comes as the Trump administration keeps pressuring South Korean chipmakers to expand manufacturing in the US, while massive investment in AI data centers is tightening global memory chip supply. The people said the proposed project is unrelated to SK Hynix's talks with Intel Corporation, which involve producing memory chips at Intel Corporation's Ohio facility. SK Hynix said its US subsidiary Solidigm is reviewing various options to enhance business competitiveness but has not confirmed any specific plan. Building a US plant could reduce reliance on its Dalian facility and help avoid tariffs and export restrictions A US plant would reduce Solidigm's dependence on its only NAND production facility in Dalian, China, while helping it avoid potential US tariffs and the impact of chip equipment export restrictions. News of the expansion comes as Chinese competitors are rapidly increasing capacity to narrow the technology gap with foreign rivals. However, one source cautioned that no agreement has been reached on Solidigm's US investment and key project details are still under discussion. SK Hynix may proceed cautiously, because making chips in the US is more expensive than in South Korea, while Washington and Seoul are still negotiating trade and investment matters. Following the news, SK Hynix shares closed up 6.4% in Seoul, while the benchmark KOSPI index rose 2.7%. South Korea's stance is nuanced, and political resistance to NAND may be less than for DRAM When asked about US pressure on South Korean chipmakers to build plants in the US, South Korean President Lee Jae-myung said Seoul will seek to "protect South Korea's national interests while respecting companies' views." He said on Friday that "this remains a controversial issue" but did not elaborate. One source said SK Hynix may face less political resistance in producing NAND chips through its US subsidiary, because the technology is less strategically sensitive than advanced DRAM products such as high-bandwidth memory (HBM). The South Korean government has urged SK Hynix and rival Samsung to accelerate plans to build a new semiconductor manufacturing cluster in southwestern South Korea, with potential investment reaching hundreds of billions of dollars. Reported possible opposition from Seoul could complicate SK Hynix's ambitions to produce advanced memory chips such as HBM and even conventional DRAM at Intel Corporation's plant. US Commerce Secretary Howard Lutnick has threatened tariffs of up to 100% unless South Korean and Taiwanese companies commit to expanding production in the United States. South Korean chipmakers are being pulled in two directions by Washington and Seoul, which are also negotiating South Korea's $350 billion investment commitment to the US last year in exchange for lower US tariffs. It is understood that DRAM provides working memory for processors, while NAND stores data in phones, computers and data centers. Solidigm has posted years of losses, and its US IPO prospects draw attention Since SK Hynix acquired Solidigm from Intel Corporation for $9 billion in 2020, the business has faced years of losses due to a prolonged downturn in the NAND market. While US expansion could help SK Hynix narrow its market share gap with Samsung and fend off competition from China, it remains unclear how demand will develop by the time a new plant begins production. Adding new semiconductor capacity typically takes years, and concerns about slowing development of frontier AI models are clouding the long-term outlook for memory chip demand. Media reported last month that SK Hynix is planning a pre-IPO fundraising round of 5 trillion to 10 trillion won for Solidigm. The report said Solidigm has begun recruiting executives responsible for SEC filings and external financial disclosures, further strengthening market expectations that it will list on Nasdaq. SK Hynix subsequently responded that Solidigm is evaluating various measures to improve competitiveness but has not made any decisions. If Solidigm successfully lists on Nasdaq, it would mark a further deepening of SK Hynix's US capital markets presence. In July this year, the South Korean memory chip giant issued 177.9 million American depositary receipts (ADRs) at $149 each, raising $26.5 billion and setting a record for fundraising by a foreign company listing in the US.