SK Hynix's proposed New York factories face US approval dispute

To help pay for factories in New York, SK Hynix wants to make more chips in China, according to people familiar with its plans. Washington's restrictions on sending American chipmaking equipment to China are complicating that route to US investment, Reuters reported on November 3.

The company's Solidigm subsidiary is pursuing two NAND memory factories in Marcy, New York, with an initial investment of about US$45 billion, two people told Reuters. NAND stores data even when the power is off and is used in data centres. The people said expanding production at the company's Dalian plant would generate revenue to help build in the United States, but the Commerce Department has yet to approve the equipment export licences. The Marcy Nanocenter has room for two more factories alongside Wolfspeed, potentially filling a site that spent decades in development, according to the Observer Dispatch.

Solidigm executives have met Commerce officials nearly 10 times since late August, according to one person familiar with the talks. At a meeting last week, Commerce Under Secretary Jeffrey Kessler maintained his opposition to allowing additional American tools into China to expand or upgrade production, that person said. Commerce had not formally rejected the expansion licence, and a separate equipment licence to maintain the Dalian plant in 2027 was also under negotiation.

The talks put Washington's push for domestic chipmaking alongside restrictions designed to keep American technology from helping China's military. There is another approval to secure: Reuters' sources said Treasury would need to waive outbound investment restrictions for the equipment purchases. One person said Treasury was waiting for Commerce's decision.

Solidigm's public position is less definite than the investment plans described by Reuters' sources. The company said it was considering factory locations worldwide and had made no decision on a specific course of action. The next step towards the proposed New York factories runs through Washington's decisions on equipment for Dalian.