SK hynix to expand production capacity in China as it mulls Solidigm IPO
Memory maker SK hynix has resumed investments in its Chinese facility despite previous pauses due to market downturns and U.S. export restrictions. According to a report by Sedaily, the company plans to increase production capacity at its Dalian plant by 50% as early as 2027.
Resuming Investments in Dalian
The factory in Dalian, China, is operated by Solidigm, a subsidiary formed after SK hynix acquired Intel's 3D NAND and SSD business in 2021. Previously, expansion was paused due to the memory market downturn in 2022–2023 and U.S. export controls on advanced fab tools.
Now, with demand for solid-state storage hitting record levels—especially for high-capacity SSDs from Solidigm—SK hynix has resumed construction of the second phase of the Dalian fab. Construction is reportedly complete, and production equipment installation could begin as early as November this year.
The new phase is designed for a wafer output capacity of around 50,000 wafers per month (WSPM). Combined with the existing 100,000 WSPM from the first phase, this would boost total NAND production capacity in Dalian to approximately 150,000 WSPM. Floating gate 3D NAND flash production is expected to start in the second half of 2026, with mass production beginning in the first half of 2027.
Technological Upgrades and New Products
A key aspect of the expansion is the ability to use new technologies enabled by recent U.S. licenses. At the end of last year, the U.S. government granted SK hynix and Samsung annual licenses to ship semiconductor production equipment containing American-developed technologies to their Chinese fabs through 2026.
This allowed Solidigm to begin developing floating gate QLC NAND memory with over 200 active layers. These drives are expected to be introduced in the second half of 2026 and will enable the production of 245TB-class SSDs in decent quantities, potentially starting in 2027.
Considering a Solidigm IPO
In parallel with expanding production, SK hynix is considering listing some of Solidigm's shares on NASDAQ to raise capital—up to $7 billion, according to unofficial reports. The funds would be used to expand capacity and increase output of premium data center-grade SSDs.
Importantly, SK hynix intends to retain control over Solidigm even after the IPO. In regulatory filings from August 5, the company stated that it is considering various ways to improve competitiveness, but the final decision has not yet been made.
What This Means for the Market
Increased production in China will allow Solidigm to scale up output of high-performance SSDs currently facing shortages. This could impact availability and pricing for enterprise and enthusiast markets.
However, it's important to note that SK hynix has not officially confirmed the IPO plan or specific timelines. Details remain based on reports from Sedaily and The Korea Herald, so final outcomes depend on implementation and external factors including geopolitical conditions.
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