SK hynix Restarts Dalian NAND Plant Expansion

According to South Korean media outlet Sedaily, memory chip manufacturer SK hynix has resumed construction of the second NAND Flash production line at its Solidigm facility in Dalian, China. The expansion project is expected to increase SK hynix’s local NAND production capacity by approximately 50%.

The Dalian facility was originally acquired through SK hynix’s $9 billion purchase of Intel’s NAND business. On October 20, 2020, SK hynix and Intel announced an agreement under which SK hynix would acquire Intel’s NAND SSD business, NAND component and wafer operations, as well as Intel’s NAND Flash manufacturing plant in Dalian, China. Intel retained its Optane memory business as part of the transaction.

On December 22, 2021, China’s State Administration for Market Regulation (SAMR) granted conditional approval for the acquisition, marking the completion of regulatory approvals from major global authorities. Following the deal, SK hynix established the acquired NAND business as an independent subsidiary, Solidigm.

On May 16, 2022, the Dalian non-volatile memory project operated by SK hynix Intel DMTM Semiconductor (Dalian) Co., Ltd. officially began construction in Dalian Jinpu New Area. The facility was designed for the production of 3D NAND Flash memory products and became SK hynix’s second NAND manufacturing plant in Dalian.

However, shortly after the project was announced, construction was suspended for an extended period due to difficulties in semiconductor equipment procurement caused by U.S. export restrictions on China, combined with a downturn in the global memory market.

Latest reports indicate that SK hynix resumed investment in the Dalian second plant during the first half of this year and restarted construction activities. The company is expected to begin moving production equipment into the facility as early as November, with the goal of establishing a mass production system and starting NAND Flash production in the first half of next year.

Industry sources said the Dalian second plant will be equipped with similar manufacturing tools as the existing first plant, with planned wafer input capacity of around 50,000 wafers per month. Since the current Dalian first plant has a monthly capacity of approximately 100,000 wafers, the expansion will increase SK hynix’s overall NAND production capacity in Dalian by about 50%.

The decision to restart the Dalian expansion comes as the rapid growth of artificial intelligence (AI) applications continues to drive demand for large-scale data centers. Rising demand for enterprise solid-state drives (eSSDs) has significantly boosted NAND Flash demand, pushing NAND prices sharply higher over the past year.

Through the expansion, SK hynix plans to implement a dual-track NAND production strategy. The Dalian facility will focus on mature NAND technologies using floating-gate (FG) structures, including around 100-layer NAND Flash products, to improve manufacturing efficiency. Meanwhile, more advanced NAND products with more than 300 layers will be concentrated at domestic production sites in South Korea, including the M17 plant in Cheongju.

Previously, SK hynix announced a KRW 19.1 trillion investment in the Cheongju M17 facility, which is expected to complete its first cleanroom by the end of 2028 and begin production of next-generation NAND memory products. The combined expansion of its China and South Korea facilities reflects SK hynix’s strategy to strengthen NAND supply capacity while preparing for long-term growth driven by AI infrastructure demand.