Samsung Electronics and SK Hynix are upgrading their factories in China to produce more advanced NAND memory chips, aiming to meet huge AI demand and fend off a fast-growing Chinese rival, Reuters reported on October 21. Why it matters: the chips that store data for AI data centres are now a front line in the US-China technology contest — and the two South Korean giants are trying to modernise plants in China without falling foul of US export controls.
October 21, 2026
What are Samsung and SK Hynix doing in China?
Both companies are refitting their Chinese plants to make NAND flash memory with more than 200 layers, bringing those factories in line with what they already produce in South Korea, according to four people familiar with the plans who spoke to Reuters. NAND retains data without power and is widely used in smartphones, PCs, and solid-state drives for AI data centres; more layers per chip means more storage density and lower costs.
Samsung and SK Hynix both confirmed to Reuters that upgrades were underway and were being done in close consultation with Washington, but neither disclosed the production details Reuters reported.
What are the specific plans?
Samsung’s plant in Xi’an accounts for about 40% of its global NAND output and currently makes chips with about 200 layers. Under a project known internally as “Monami,” Samsung is converting it to make 286-layer V9 NAND, aiming for monthly output of 5,000 wafers in December 2026 and 40,000 wafers by December 2027, one person said. Samsung said the upgrade complies with US export regulations and is “aimed at meeting growing demand from global customers, including those in the US,” adding that it is not expanding capacity or building new facilities.
SK Hynix is looking to switch its Dalian facilities — acquired when it bought Intel’s NAND operations in 2021 and now the sole NAND manufacturing site for its Solidigm business — from 192-layer products to 240 layers or more. One person said the company may also seek permission to research 300-plus-layer chips there.
Why is the US licence question unresolved?
Since 2022, both companies have needed annual US licences to install US-made equipment in China. The Commerce Department’s Bureau of Industry and Security said in 2025 that it did not intend to grant licences to upgrade technology or expand capacity at their Chinese factories, and it did not directly address Reuters’ questions about the current approvals. Reuters could not determine how far Washington has licensed the equipment these upgrades need.
Meanwhile, China’s Yangtze Memory Technologies Co (YMTC) has taken 38.5% of China’s NAND market in the second quarter, up from 28% for all of 2025 and overtaking Samsung, according to research firm Omdia. Samsung’s share slipped to 33.5% and SK Hynix’s to 17%.
Why it matters
This is the AI hardware story underneath the model headlines: demand from AI data centres is pulling even politically sensitive factory upgrades forward. Samsung and SK Hynix are caught between a Chinese rival gaining share at home and US rules designed to slow China’s progress — rules that, on the 2025 wording, were not meant to allow exactly this kind of upgrade. Whether Washington has quietly licensed it, and how far the refits actually get, will say a lot about where AI memory supply — and its prices — go next.
Frequently asked questions
What chips are Samsung and SK Hynix upgrading their China plants to make?
More advanced NAND flash memory: Samsung is converting its Xi’an plant to 286-layer V9 NAND, and SK Hynix plans 240-layer or higher products at Dalian, up from about 200 and 192 layers today.
Why do AI data centres care about NAND?
NAND is the storage memory used in solid-state drives, including those in AI data centres. More layers per chip means more storage in the same space at lower cost, which matters as AI demand for storage grows.
Have the US approved these upgrades?
That is unclear. Both companies say the work is being done in close consultation with Washington and complies with export rules, but Reuters could not determine how far US authorities have granted the equipment licences the plans require.
Who is YMTC and why does it matter here?
Yangtze Memory Technologies Co is China’s leading NAND maker. It overtook Samsung in China’s NAND market with a 38.5% share in the second quarter, according to Omdia — the competitive pressure behind these upgrades.
Sources: Reuters (via DevDiscourse syndication), KuCoin News, Traders Union