Samsung, SK Hynix Upgrade Chinese Factories for AI Data Center Memory
South Korean memory giants plan to produce advanced flash chips in China to counter domestic rivals, despite U.S. export restrictions.
Key points
- Samsung targets 286-layer NAND production at its Xian plant by year-end.
- SK Hynix aims for 240-plus layer chips at its Dalian facility.
- U.S. export controls complicate equipment upgrades for both firms.
Samsung Electronics and SK Hynix are reportedly upgrading their manufacturing facilities in China to produce advanced memory chips for artificial intelligence data centers, according to Tom's Hardware. The move is designed to fend off growing competition from domestic Chinese memory makers such as ChangXin Memory Technologies.
These two companies, which dominate global NAND flash memory production, are shifting focus to meet surging demand for high-performance components. Tom's Hardware reports that fierce competition in the lucrative AI RAM market has already prompted manufacturers to slash consumer-focused production. This strategic pivot allows them to increase capacity for advanced, high-margin components required by AI infrastructure.
Manufacturing Targets and Locations
Samsung Electronics aims to switch its Xian plant to the production of 286-layer flash chips by the end of the year. This upgrade targets V9 NAND chips, boosting the facility's output from around 200 layers. The Xian factory is critical to Samsung's global supply chain, producing approximately 40 percent of the company's total NAND output.
SK Hynix has set a slightly lower target for its Dalian facility, aiming to produce chips with 240 or more layers. The Dalian factory was taken over by SK Hynix in 2021, but a specific timescale for these new upgrades remains unclear. Both facilities are being modernized to counter rising domestic competitors in the Chinese market.
Regulatory Headwinds
Both South Korean firms face significant complications from U.S. export controls on chipmaking equipment, which were applied in 2022 to slow China's technological progress. According to Tom's Hardware, Samsung and SK Hynix must now obtain licenses to install U.S.-built hardware in their Chinese factories. This regulatory hurdle has hampered their ability to upgrade facilities quickly enough to meet new AI memory demand.
These restrictions have inadvertently aided the growth of Chinese firms like Yangtze Memory Technologies Co. (YMTC). As Threat Times reported on 2026-10-21, Samsung and SK Hynix previously upgraded China fabs for 200-layer NAND to counter YMTC. YMTC has told investors it aims to become the world's largest NAND flash producer by the end of 2027.
What should you do?
Security and technology professionals should monitor supply chain announcements from major memory vendors for any signs of production delays or capacity shifts. Organizations relying on specific memory configurations for AI workloads should diversify their supplier base to mitigate risks associated with geopolitical export controls.
WATCH THE NEWS:
- Track official statements from Samsung and SK Hynix regarding U.S. license approvals.
- Monitor quarterly earnings reports for changes in capital expenditure on Chinese facilities.
- Watch for shifts in NAND flash pricing as production capacities adjust globally.
What to do and how to stay safe: Samsung
- Review current memory procurement contracts for clauses related to supply chain disruptions.
- Identify alternative vendors for critical AI infrastructure components to reduce single-source dependency.
- Update risk assessments to include geopolitical factors affecting semiconductor manufacturing equipment.
- Consult with legal teams on compliance requirements for importing chips from regions with export restrictions.
Step-by-step guide: Prompt Injection Warning Signs: How to Spot AI Manipulation
General security guidance from the Threat Times newsroom. It is not confirmed advice from the organisations named in this story.
Frequently asked questions
Which Chinese factories are being upgraded by Samsung and SK Hynix?
Samsung is upgrading its Xian plant for 286-layer chips, while SK Hynix is targeting its Dalian facility for 240-plus layer production.
Why are U.S. export controls relevant to these upgrades?
Samsung and SK Hynix must obtain U.S. licenses to install American-made chipmaking equipment in their Chinese factories, complicating the upgrade process.
How does this relate to previous competition with YMTC?
As Threat Times reported on 2026-10-21, these firms previously upgraded fabs to counter YMTC; current upgrades aim to counter broader Chinese competition including CXMT.
