Samsung Electronics and SK Hynix are upgrading their chip plants in China to produce more advanced NAND memory chips, four people familiar with the plans told Reuters. The move is aimed at fending off competition from Chinese rival Yangtze Memory Technologies Co (YMTC) and meeting huge demand from artificial intelligence data centres.
Samsung's facility in Xian, northwestern China, which accounts for about 40% of the company's global NAND output, currently makes chips with about 200 layers. Under a project internally known as "Monami", the plant is being converted to produce 286-layer V9 NAND chips, with one person saying Samsung is targeting monthly output of 5,000 wafers in December this year and 40,000 wafers by December 2027.
Samsung said the upgrade complies with US export regulations and is aimed at meeting demand from global customers, including those in the United States. It said it is not expanding production capacity or constructing new manufacturing facilities.
SK Hynix is switching its Dalian facilities in northeastern China to NAND products with 240 layers or more, from 192 layers today, three people said. The site was acquired when SK Hynix bought Intel's NAND operations in 2021 and remains the sole manufacturing plant for that business, now named Solidigm and preparing for a US initial public offering. One person said the company is authorised to make chips with up to 240 layers at Dalian and may seek US permission to conduct research and development on 300-plus-layer chips there. SK Hynix is also in discussions with the Trump administration over building a new NAND factory in the United States.
The upgrades come despite restrictions that have made investment in China a tricky question since Washington began imposing export controls on some chip-making equipment in 2022. Both companies are required to seek annual US licenses to install US-made equipment such as etching machines in China. The Commerce Department's Bureau of Industry and Security said in 2025 it did not intend to grant licenses to upgrade technology and expand capacity at the foreign chipmakers' Chinese factories, while saying it intended to grant licenses for them to operate existing plants.
Asked about the current approvals, the bureau referred Reuters to that 2025 statement. Reuters could not determine to what extent US authorities have granted export licenses for the equipment Samsung and SK Hynix need for their planned upgrades. Both companies confirmed the work is being done in close consultation with Washington.
Competitive pressure from YMTC has been building. The Chinese company held 38.5% of China's NAND market in the second quarter, up from 28% for all of 2025 and overtaking Samsung, according to research firm Omdia. Samsung's share slipped to 33.5% from 36%, while SK Hynix's dropped to 17% from 20%. YMTC mostly produces 160- and 232-layer chips, makes a small amount of 294-layer chips and plans to manufacture products with more than 300 layers. YMTC did not respond to a request for comment.