SK Hynix announced plans to expand production capacity in China and is considering an IPO for its Solidigm subsidiary; the Chinese fab's second phase could boost local production by 50%.
SK hynix has resumed investments in its fab in Dalian, China, operated by its Solidigm subsidiary, and plans to boost output by 50% in 2027, according to reports. The company is simultaneously considering listing some of Solidigm's shares on NASDAQ to raise capital while retaining control over its North America-based subsidiary.
After acquiring Intel's 3D NAND and SSD business in 2021, SK hynix formed Solidigm and subsequently suspended expansions of the subsidiary's Chinese capacity due to the memory market downturn from 2022 to 2023 and U.S. export controls restricting advanced fab tool exports to China. With demand for solid-state storage reaching record levels and Solidigm's high-capacity SSDs seeing exceptionally strong demand, SK hynix is reconsidering capacity plans for the Dalian fab ahead of Solidigm's potential initial public offering.
Following a four-year pause, Solidigm has resumed investment in its Dalian facility this year. Construction of the facility's second phase is complete, with production equipment installation planned to begin as early as November. Mass production of floating gate 3D NAND flash is expected to commence in the first half of 2027.
The second phase is designed for approximately 50,000 wafer starts per month (WSPM). Combined with roughly 100,000 WSPM from the existing first phase, the new phase would increase Solidigm's Dalian NAND production capacity by approximately 50%, to around 150,000 WSPM total.
The U.S. government granted SK hynix and Samsung annual licenses through 2026 to ship semiconductor production equipment containing American-developed technologies to their Chinese fabs, replacing their previous open-ended Validated End User exemptions. This allows both companies to upgrade their Chinese facilities and deploy new process technologies.
Solidigm plans to begin manufacturing floating gate 3D QLC NAND memory with over 200 active layers at its Dalian facility in the second half of 2026. The additional capacity will increase bit output and enable production of 245TB-class SSDs in significant quantities during 2027.
Solidigm controls roughly a quarter of the data center-grade SSD market and represents a premium-priced, high-demand asset in SK hynix's portfolio. A NASDAQ listing would enable SK hynix to raise up to $7 billion while maintaining control over the subsidiary. These proceeds would support Solidigm's capacity expansion and premium data center SSD production.
SK hynix has not officially confirmed the Solidigm IPO plan. Its regulatory filing on August 5 stated that Solidigm was considering various ways to improve competitiveness, though a final decision remains pending.