Samsung Electronics (OTC:SSNLF) and SK Hynix (NASDAQ:SKHY) are reportedly upgrading Chinese factories to produce higher-layer NAND memory, even as U.S. export controls and Chinese competition complicate their plans.
Both South Korean chipmakers are targeting NAND products exceeding 200 layers. Samsung is converting its Xian facility through a project called “Monami” to manufacture 286-layer V9 NAND chips, Reuters reported, citing people with knowledge of the matter. Monthly output is expected to reach 5,000 wafers in December, potentially increasing to 40,000 by December 2027.
At the same time, SK Hynix plans to shift its Dalian operations from 192-layer products to NAND chips with at least 240 layers. The company may seek U.S. approval to research products exceeding 300 layers at the site.
Both companies told the publication that the upgrades are underway and being conducted in consultation with Washington. Samsung said the project complies with U.S. rules and does not expand capacity or add facilities.
Notably, U.S. restrictions require annual licenses for certain American equipment used in China. The report could not determine whether regulators had approved every license required for the planned upgrades.
Samsung and SK Hynix did not immediately respond to Benzinga’s request for comments.
Chinese NAND Rivals Gain Global Market Share
The upgrades come as Chinese manufacturers gain ground in NAND. Last week, Counterpoint Research said Yangtze Memory Technologies Co. (YMTC) ranked third globally in NAND shipment volume during the second quarter of 2026. YMTC trailed Samsung and SK Hynix but surpassed Kioxia and Micron Technology Inc. (NASDAQ:MU) by shipment volume. Excluding SK Hynix’s Solidigm unit, YMTC would have ranked second globally.
The competitive pressure was already building in September, when CXMT was reportedly preparing to enter NAND after capturing nearly 10% of global DRAM revenue, potentially challenging Micron and SanDisk Corp. (NASDAQ:SNDK). The Chinese chipmaker reportedly plans to establish a NAND research and development line at a new Beijing plant and has discussed the project with potential customers, including an AI startup.
Memory Chip Sell-Off Deepens on AI Spending Fears
Until last week, six major memory and storage chipmakers, including Micron, Samsung, SK Hynix, SanDisk, Western Digital Corp. (NASDAQ:WDC) and Kioxia Holdings Corp. (OTC:KXHCF), had lost a combined $1.09 trillion in market value since Oct. 2, despite strong demand for memory chips.
The recent sell-off reflects three concerns: questions about the sustainability of AI spending growth, rising competition from Chinese manufacturers such as YMTC in NAND memory, and renewed fears of Federal Reserve rate hikes after hotter-than-expected inflation data.
Elon Musk also warned that China could significantly expand RAM production by 2028, raising concerns about future oversupply. South Korea faces particular risks because semiconductors account for a major share of its exports, while D.A. Davidson analyst Gil Luria said any competitive impact would likely fall more heavily on Samsung and SK Hynix than Micron.
Price Action: Year-to-date, SK Hynix stock declined 16.80%, as per Benzinga Pro. During Wednesday’s pre-market trading session, it was trading 3.46% higher at $144.62.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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