Samsung Electronics and SK Hynix are upgrading their semiconductor manufacturing facilities in China to produce more advanced memory chips, aiming to meet rising demand from artificial intelligence (AI) data centres and counter growing competition from Chinese chipmaker Yangtze Memory Technologies Co (YMTC).
The move comes amid tighter US export controls on semiconductor manufacturing equipment, creating challenges for South Korean companies seeking to modernise their operations in China.
Samsung Targets 286-Layer NAND Chips
Samsung is upgrading its factory in Xi’an, northwestern China, which accounts for around 40% of its global NAND output. The company reportedly plans to transition production from chips with roughly 200 layers to 286-layer V9 NAND technology.
The facility is targeting monthly output of 5,000 wafers by December 2026, rising to 40,000 wafers by December 2027, according to sources cited by Reuters. Samsung said the upgrade complies with US export regulations and is intended to meet customer demand, not expand production capacity.
SK Hynix Plans Advanced Chip Production in Dalian
SK Hynix is also upgrading its Dalian facility in northeastern China. The company reportedly aims to move beyond its existing 192-layer NAND chips to products with 240 layers or more.
It may also seek US approval to conduct research and development on chips with more than 300 layers at the site. Such work could help prepare technologies for potential future production in the United States.
US Export Controls Remain a Challenge
Washington has imposed restrictions on advanced semiconductor equipment supplied to China as part of efforts to limit the country’s technological progress. Samsung and SK Hynix must obtain annual US licences to install certain American-made equipment at their Chinese factories.
Both companies have confirmed that upgrades are underway in consultation with US authorities. However, it remains unclear how much approval has been granted for the equipment needed for their plans.
Chinese Rival YMTC Gains Market Share
The upgrades come as YMTC strengthens its position in China’s NAND memory market. According to research firm Omdia, YMTC captured 38.5% of the market in the second quarter of 2026, overtaking Samsung, which held 33.5%. SK Hynix’s share stood at 17%.
YMTC is producing some 294-layer chips and reportedly plans to move beyond 300 layers, increasing competitive pressure on the South Korean manufacturers.
Why Advanced NAND Chips Matter
NAND flash memory stores data even when power is switched off. It is widely used in smartphones, computers, solid-state drives and AI data centres.
Increasing the number of layers can improve storage density and help reduce costs. As AI infrastructure expands, demand for high-capacity memory is growing, making advanced NAND technology increasingly important to the global semiconductor industry.