The Trump administration has delayed approval of export licenses that would allow SK Hynix to install American chipmaking equipment at its facility in China, complicating the South Korean company’s plans to expand semiconductor manufacturing in the United States, people familiar with the negotiations told Reuters.
SK Hynix is seeking permission to equip its Dalian plant, arguing that additional production there would generate the revenue needed to support a planned expansion of its US operations. The Commerce Department has yet to approve the licenses, leaving the company uncertain about the timing and scale of its proposed investment in New York.
The company’s Solidigm unit plans to invest about $45 billion in two NAND memory plants in Marcy, New York, two people familiar with the matter said. The investment could eventually reach approximately $100 billion.
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NAND memory retains data when power is switched off and is widely used in solid-state drives and data center storage systems. Demand has increased as cloud computing and artificial intelligence infrastructure require greater storage capacity alongside the high-performance memory used to process data.
The negotiations expose a policy dilemma for Washington: how to attract large foreign semiconductor investments while maintaining restrictions intended to prevent American technology from strengthening China’s advanced manufacturing capabilities.
The proposed expansion would require SK Hynix to obtain US export licenses for equipment used at its Dalian facility. The company argues that installing equipment in existing cleanroom space would not increase the plant’s overall capacity because the cleanroom was built in 2023.
However, the company also wants to manufacture more sophisticated NAND products in China, a move that has raised concerns within the Commerce Department about whether the proposed equipment shipments would effectively upgrade the facility’s technological capabilities.
“Ultimately, none of this is going to go forward without a green light from the White House,” said Leland Miller, a member of the US-China Economic and Security Review Commission, a bipartisan panel established by Congress.
Negotiations are continuing, with the outcome of the Dalian license request central to SK Hynix’s proposed New York investment, the people said.
The discussions have intensified in recent months. Executives from Solidigm, SK Hynix’s US subsidiary, have held nearly 10 meetings with Commerce Department officials since late August, one person familiar with the matter said.
At a meeting last week, Commerce Under Secretary Jeffrey Kessler maintained the department’s position against allowing additional American chipmaking equipment into China for upgrading or expanding manufacturing capacity. However, the department has not formally rejected the request to ship equipment needed to fill unused cleanroom space in Dalian.
The two sides are also discussing a separate license for 2027 covering equipment needed to maintain the existing facility, according to the person.
At an earlier meeting in late August, Solidigm co-CEO Richard Chin and other executives met Commerce Secretary Howard Lutnick and Kessler. The administration officials appeared interested in the proposed US investment and the possibility of establishing a major NAND manufacturing operation in New York, the person said.
Since that meeting, Solidigm has prepared several versions of its license applications as it works with the department to refine its requests.
The discussions are seen as an indication that Washington is considering the economic benefits of the proposed investment alongside its restrictions on technology transfers to China. However, it is not clear whether equipment shipments that SK Hynix describes as necessary to use existing factory space would also enable technological improvements that the US government has sought to prevent.
Treasury Approval’s Concerns
The Commerce Department is not the only US agency involved. Solidigm representatives have also met Treasury Department officials because SK Hynix would need a waiver of outbound investment restrictions to purchase certain equipment for its Chinese operations, according to people familiar with the discussions.
Treasury officials indicated that they would wait for the Commerce Department’s decision before determining their position, one person said.
The uncertainty has drawn attention from officials in New York, where the proposed facilities could generate substantial investment and manufacturing activity. Anthony Picente, executive of Oneida County, where the plants would be located, said he hoped the federal government would provide an answer within weeks.
“Hopefully we’ll have an answer in the next couple of weeks,” Picente said, noting that a federal investment tax credit expires at the end of the year.
The timing could affect the project’s financing and implementation, although Solidigm has not formally committed to the New York location.
In a statement last week, the company said it was evaluating possible locations for a NAND manufacturing facility around the world.
“As a US-founded and headquartered company, Solidigm regularly evaluates strategic alternatives to best serve its customers and enhance its long-term competitiveness. The company is currently exploring options for building a NAND memory fab at potential locations around the world. No decision regarding any specific course of action has been made,” it said.
Solidigm, based in Rancho Cordova, California, maintained that position when contacted again.
The company had also explored an initial public offering for Solidigm as a possible way to finance US production facilities and meet rising memory demand. However, SK Hynix said in an October 23 statement that it had suspended its review of IPO options because of market conditions and share-price trends.
“Expanding Solidigm’s production capacity and strengthening its competitiveness remain important priorities,” the company said.
Earlier Export Exemptions Replaced by Annual Licenses
SK Hynix’s position in China is partly rooted in its acquisition of Intel’s NAND business. The South Korean company agreed in 2020 to acquire Intel’s Dalian NAND factory for $9 billion, taking control of the facility and its solid-state drive storage business shortly before Washington introduced sweeping restrictions on American semiconductor equipment exports to advanced chip factories in China.
Initially, the US government exempted foreign-owned semiconductor facilities operating in China from some of the restrictions. That arrangement allowed companies such as SK Hynix to continue receiving American equipment for their Chinese operations.
Last year, however, the Commerce Department revoked those authorizations, describing them as a “Biden-era loophole.” They were replaced with annual licensing requirements that allow suppliers to ship certain equipment and technology to the facilities, subject to quantity limits.
In an August 2025 statement, the department said it did not intend to issue licenses that would permit technology upgrades or capacity expansion at semiconductor factories in China.
That policy now creates a difficult situation for SK Hynix. The company says its request to install equipment in unused Dalian cleanroom space would not increase the facility’s capacity, while its plans to manufacture more advanced NAND products there could still be viewed by US officials as a technological upgrade.
The outcome will have implications beyond the two companies. Washington is seeking to attract semiconductor manufacturing investment and strengthen domestic supply chains, while limiting China’s access to advanced chipmaking technology. SK Hynix’s proposed New York facilities offer a significant potential contribution to the first objective, but the company’s continued dependence on its Chinese operations complicates the second.