SEOUL — South Korean semiconductor giants Samsung Electronics and SK Hynix are upgrading their manufacturing operations in China to strengthen their positions in the memory chip industry and meet rising demand driven by artificial intelligence.
The projects focus on producing more advanced NAND memory chips, according to four people familiar with the plans cited by Reuters. Both companies are facing growing competition from China’s Yangtze Memory Technologies Co (YMTC), which has been expanding its share of the domestic market.
The upgrades are proceeding amid strict U.S. export controls introduced in 2022 to limit China’s access to certain semiconductor manufacturing equipment. Samsung and SK Hynix are required to secure U.S. licenses each year to install American-made machinery, including etching equipment, at their Chinese facilities.
These restrictions have complicated investment decisions and efforts to improve manufacturing technology. In 2025, the U.S. Commerce Department’s Bureau of Industry and Security indicated that it did not plan to approve licenses for technology upgrades and capacity expansion at foreign chipmakers’ facilities in China.
Nevertheless, both South Korean manufacturers are moving forward with equipment installations while consulting with U.S. authorities.
Samsung is modernizing its factory in Xi’an through a project known as “Monami.” The facility currently manufactures NAND memory chips with approximately 200 layers, while the planned improvements aim to enable production of 286-layer V9 NAND chips.
The company plans to raise output to 40,000 wafers per month by the end of 2027. The initiative is intended to enhance the technological capabilities of Samsung’s Chinese operations as competition across the memory chip sector intensifies.
SK Hynix is pursuing similar improvements at its manufacturing facility in Dalian. Its plans call for transitioning from 192-layer NAND chips to 240-layer products. The company could also seek U.S. authorization to carry out research and development on chips exceeding 300 layers at the Chinese site.
Competition from domestic manufacturers has become increasingly challenging for the South Korean companies. YMTC captured 38.5% of China’s NAND market in the second quarter of 2026, surpassing Samsung, according to the Reuters report.
Outside China, Samsung and SK Hynix manufacture NAND products reaching up to 286 and 321 layers, respectively. Meanwhile, YMTC is developing 294-layer chips and intends to move beyond 300 layers, underscoring the rapid pace of technological advancement in the industry.
NAND memory is widely used in storage products and electronic devices, making advanced manufacturing capabilities essential for companies supplying various technology markets. Growing demand linked to AI infrastructure has further increased the industry’s emphasis on developing more sophisticated memory technologies.
The success of the planned upgrades will partly depend on whether Samsung and SK Hynix secure the required regulatory permissions and obtain the equipment needed to carry out their production targets.
The developments highlight the challenges facing multinational semiconductor manufacturers as they seek to maintain access to China’s market while confronting stronger domestic rivals and restrictions on technology transfers.
For the global semiconductor industry, sustaining advanced manufacturing capabilities while navigating geopolitical and regulatory barriers remains a significant strategic challenge.
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