The Dalian fab is the world's only facility to produce 192-layer floating gate 3D NAND for Solidigm's data center-grade SSDs for AI, enterprise, and hyperscale data centers. Its manufacturing operations rely on equipment from major American suppliers, including Applied Materials, KLA, and Lam Research, whose exports to China require a license from the U.S. government. Although the U.S. authorities tend to authorize shipments of some tools to semiconductor facilities in the People's Republic that are operated by multinational companies like Samsung or SK hynix, they only want to keep the fabs running, as they are against expansions of capacity of fabs in China or introducing new manufacturing technologies to these facilities.
Solidigm has requested U.S. export licenses for additional tools, but the U.S. government has yet to authorize the shipments. Last December, the U.S. Commerce Department granted SK hynix a limited authorization for equipment deliveries to Dalian for 2026, but it has not issued a similar equipment export authorization for 2027, according to Reuters . In a bid to persuade the U.S. government to authorize shipments of necessary tools to its Dalian facility, SK hynix proposes to build a 3D NAND facility in America. This would fill an important gap in the Trump administration’s efforts to bring semiconductor manufacturing back to the U.S.
SK hynix's Solidigm subsidiary wants to install additional manufacturing equipment in the unused portions of its Dalian Mod B facility, which was completed in 2023. The company never fully equipped the building because of the memory market downturn at the time, so while some production tools are installed, substantial space remains unused and is available for additional tools. Given that Solidigm sells every single SSD it produces, unused capacity means lost revenue. Meanwhile, because the building was completed in 2023, installation of tools into that facility does not constitute a capacity expansion.
Additional NAND production in China could generate profits that Solidigm could use to finance its proposed American fab and support its operations until domestic manufacturing capacity becomes available. The company is also considering an initial public offering as early as 2027 to raise additional capital.
SK hynix to expand production capacity in China as it mulls Solidigm IPO, report claims
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Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/pc-components/ssds/SPONSORED_LINK_URL
- https://www.tomshardware.com/pc-components/ssds/sk-hynix-reportedly-playing-hardball-with-trump-admin-over-3d-nand-fab-company-demands-increased-chipmaking-equipment-exports-to-china-in-exchange-for-us-fab#main
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