Solidigm under SK Hynix (SKHY.US) is considering building a NAND factory in the U.S., but cost and political resistance remain

According to Odaily, three sources familiar with the matter revealed that Solidigm, a subsidiary of Korean memory chip giant SK hynix (SKHY.US), is considering building a NAND flash memory chip factory in the United States, with upstate New York as the main candidate location. This move comes as the Trump administration continues to pressure Korean chipmakers to expand U.S. manufacturing, and massive AI data center investments are tightening global memory chip supply.

According to sources, the proposed project is unrelated to negotiations between SK hynix and Intel, which involve the production of memory chips at Intel’s Ohio facility.

SK hynix stated that its U.S. subsidiary Solidigm is reviewing various options to enhance its business competitiveness, but has not confirmed any specific plans.

Building a U.S. Factory Could Reduce Reliance on Dalian Site and Circumvent Tariffs and Export Restrictions

If Solidigm establishes a plant in the United States, it will reduce its reliance on its only NAND manufacturing facility in Dalian, China, and help it avoid potential impacts from U.S. tariffs and chip equipment export restrictions.

News of this expansion comes as Chinese competitors are rapidly increasing production capacity to close the technology gap with foreign rivals.

However, one source cautioned that no agreement has yet been reached regarding Solidigm's U.S. investment, and key project details are still being discussed. SK hynix may proceed cautiously, as manufacturing chips in the U.S. is more expensive than in Korea, and trade and investment negotiations between Washington and Seoul are ongoing.

Driven by related reports, SK hynix shares closed up 6.4% in the Seoul market, while the benchmark KOSPI index rose 2.7%.

Korean Stance Delicate; Less Political Resistance for NAND Than DRAM

When asked about U.S. pressure on Korean chipmakers to build factories in the U.S., President Lee Jae-myung said Seoul would seek to “protect Korea’s national interests while respecting the views of businesses.” He commented on Friday, “This remains a contentious issue,” without elaborating further.

One source noted that SK hynix producing NAND chips via its U.S. subsidiary may face less political resistance, as the technology is not as strategically sensitive as advanced DRAM products like high bandwidth memory (HBM).

The Korean government has urged SK hynix and rival Samsung to accelerate plans to establish a new semiconductor manufacturing cluster in southwestern Korea, with potential investments amounting to hundreds of billions of dollars. According to reports, possible opposition from Seoul may complicate SK hynix’s ambitions to produce advanced memory chips such as HBM or even conventional DRAM at the Intel facility.

U.S. Commerce Secretary Howard Lutnick threatened that unless Korean and Taiwanese companies commit to expanding U.S. production, tariffs of up to 100% would be imposed.

Korean chipmakers are under dual pressure from both Washington and Seoul, as negotiations continue over Korea’s $350 billion investment pledge to the United States last year in exchange for lower tariffs from the U.S.

It is noted that DRAM provides working memory for processors, while NAND stores data in phones, computers, and data centers.

Solidigm Posts Consecutive Losses, U.S. Listing Prospects Draw Attention

Since SK hynix acquired Solidigm from Intel for $9 billion in 2020, the business has faced years of losses due to prolonged weakness in the NAND market.

Although U.S. expansion may help SK hynix close the market share gap with Samsung and fend off Chinese competition, it remains unclear how demand will evolve by the time the new factory starts production. Adding new semiconductor capacity typically takes years, and concerns about a slowdown in advanced AI model development are clouding the long-term outlook for memory chip demand.

Media reported last month that SK hynix is planning Pre-IPO financing for Solidigm worth 5 to 10 trillion KRW. The report stated that Solidigm has begun recruiting executives responsible for SEC filings and external financial disclosures, further raising market expectations of its Nasdaq listing. SK hynix later responded that Solidigm is assessing measures to enhance competitiveness but has yet to make a decision.

If Solidigm successfully lists on Nasdaq, it will mark a further deepening of SK hynix’s capital footprint in the U.S. This year in July, the Korean memory chip giant issued 177.9 million American Depositary Receipts (ADRs) at $149 per share, raising $26.5 billion, setting a record for the amount raised by a foreign company in a U.S. listing.