Samsung, SK Hynix expand China NAND capacity to 80K wafers monthly

Samsung Electronics and SK Hynix are expanding NAND flash production at their Chinese fabs, targeting a combined 70,000 to 80,000 wafers per month of advanced capacity as AI server demand for high-end storage accelerates. Samsung has been converting its Xi'an X2 line to V9 NAND since the first half of this year, while SK Hynix began equipment investment at its Dalian Plant 2 in the third quarter.

"SK Hynix plans to execute equipment investment for approximately 30,000 wafers per month of NAND capacity at Dalian Plant 2 by the first half of next year," an industry source said, adding that core manufacturing equipment including etching tools will begin arriving starting next month.

Samsung's V9 NAND, featuring 280 stacked layers, is expected to reach monthly production of 40,000 to 50,000 wafers at the Xi'an X2 line. The company has finalized a supplementary investment plan centered on additional etching equipment — a critical step in NAND manufacturing, where channel holes for electron movement must be drilled through hundreds of stacked cell layers. Equipment purchase orders are expected by the end of this year, with supplementary investment execution scheduled for the second half of next year.

The expansion highlights the strategic importance of Chinese production bases for both companies despite US export controls on semiconductor technology. Samsung's Xi'an plant accounts for 40 percent of its total NAND flash output, while SK Hynix's Dalian facility represents 30 percent of NAND production and its Wuxi plant 40 percent of total DRAM output. In 2025, Samsung's equity investment in the Xi'an plant surged 68 percent year-over-year to ₩465.4 billion (approximately $334 million). SK Hynix's combined investment across Wuxi and Dalian exceeded ₩1 trillion (approximately $723.3 million).

Xi'an and Dalian Anchor the AI Storage Push

The capacity expansion comes as AI infrastructure buildout drives demand for high-end NAND used in enterprise SSDs and AI servers. NAND flash, the non-volatile memory that stores data in solid-state drives, has become a bottleneck in AI data center deployments as model training and inference workloads generate massive data volumes.

The two Korean memory giants are treating their Chinese fabs as key pillars of high-end NAND mass production. SK Hynix's Dalian plant was acquired through its takeover of Intel's NAND business in the second half of 2020, with a groundbreaking ceremony for Plant 2 held in 2022. Equipment investment had been deferred due to market conditions until now.

The investment cycle also reflects broader industry dynamics. Micron, the third-largest NAND producer, has warned that the "memory wall" limiting AI performance may worsen, while SK Hynix has reaffirmed mass production of 12-layer HBM4 with 16-layer products entering qualification. The NAND expansion in China complements these efforts, giving both companies additional capacity to serve the AI storage market.

Investor Implications

For investors, the expansion points to sustained demand for advanced memory products. Samsung Electronics and SK Hynix shares have benefited from the AI memory cycle, with Korean retail investors pouring nearly ₩984.5 billion (approximately $712 million) into the 3x leveraged semiconductor ETF SOXL over the past week alone. The Roundhill Memory ETF, which holds Samsung, SK Hynix, and Micron, attracted $88.78 million in net purchases.

The companies' commitment to expanding high-end NAND production in China — despite geopolitical tensions — reflects a strategic calculus: Chinese fabs offer cost advantages and proximity to the world's largest data center market. As AI server deployments accelerate globally, the additional capacity from Xi'an and Dalian could help ease NAND supply constraints while providing both companies with a competitive edge over rivals.

This article is for informational purposes only and does not constitute investment advice.