Samsung and SK Hynix Upgrade China NAND Plants as YMTC Takes Market Lead

Two major factories face a technology and licensing test

Samsung Electronics is converting its Xi'an factory in China to make NAND memory chips with 286 layers, targeting 5,000 wafers a month in December 2026 and 40,000 a month by December 2027, according to people familiar with the plans. SK Hynix is pursuing an upgrade at its Dalian plant from 192 layers to at least 240 as Chinese rival Yangtze Memory Technologies, known as YMTC, takes a larger share of the market.

The plans, detailed on October 21, 2026, concern factories that are central to the South Korean companies' storage businesses. Xi'an alone accounts for about 40 percent of Samsung's global NAND output. Both companies have confirmed that work is underway in consultation with Washington, although they have not publicly disclosed the detailed production schedules.

American permission is a central condition because the plants depend on equipment subject to United States export controls. Washington has moved the companies from a system of exemptions to annual equipment licenses, while maintaining a stated policy of allowing existing Chinese factories to operate rather than approving technology upgrades or capacity expansion.

The commercial pressure is already visible. Market researcher Omdia puts YMTC's share of China's NAND market at 38.5 percent in the second quarter of 2026, ahead of Samsung's 33.5 percent and SK Hynix's 17 percent. The Korean companies are trying to modernize important production bases while navigating rules intended to limit China's access to advanced chip manufacturing.

What more layers mean for storage

NAND flash memory stores information even when a device loses power. It holds photographs, applications and files in smartphones and computers, and supplies storage inside solid state drives used in artificial intelligence data centers. AI systems need this storage to keep large collections of information available for processing.

Manufacturers stack memory cells vertically to fit more storage into a chip. Adding layers can increase storage density and reduce the cost of storing each unit of data. A wafer is the thin disc on which many chips are manufactured before they are separated and packaged.

Samsung's Xi'an factory currently makes NAND with about 200 layers, according to people familiar with its operations. Moving to 286 layers would bring that plant closer to technology Samsung already sells outside China. SK Hynix's move from 192 layers to 240 would increase the layer count by 25 percent.

Production volume and storage output are related but different measures. A factory can process a similar number of wafers while producing more storage if each chip holds more data. This helps explain why replacing an older product with a denser one matters commercially even when a company says it is keeping its factory capacity unchanged.

Samsung's Monami project targets an eightfold ramp

Samsung's conversion program is known internally as Monami, a name drawn from the French expression for "my friend." The project would introduce its ninth generation V9 NAND technology, with 286 layers, at the Xi'an plant in northwestern China.

The reported schedule calls for monthly production of the upgraded product to rise from 5,000 wafers in December 2026 to 40,000 in December 2027. That is an eightfold increase in the planned V9 production rate over a year as the factory changes its product mix.

Samsung said the work complies with American export regulations. In its statement, the company described the upgrade as a response to customer demand and said it would keep the existing factory footprint:

The upgrade is aimed at meeting growing demand from global customers, including those in the US. The company is not expanding production capacity or constructing new manufacturing facilities.

Xi'an's share of Samsung's worldwide NAND production makes the conversion consequential beyond China. Updating a plant responsible for roughly two out of every five units of the company's NAND output could help Samsung supply denser storage to customers across several markets.

Dalian connects a China upgrade with possible US production

SK Hynix is installing equipment at its Dalian factory in northeastern China and has said it is communicating with the United States government about the work. People familiar with its plans describe a switch from products with 192 layers to NAND with 240 layers or more.

One person familiar with the matter said the company is authorized to manufacture chips with up to 240 layers at Dalian. The wider extent of equipment approvals for both companies' planned upgrades has not been publicly established.

SK Hynix acquired the Dalian site through its purchase of Intel's NAND operations in 2021. The acquired business, now called Solidigm, relies on Dalian as its sole NAND chip manufacturing site and is preparing for an initial public offering in the United States.

The company may also seek American permission to conduct research and development on chips with more than 300 layers in Dalian. That work could help prepare technology for potential production in the United States, where SK Hynix is discussing a new NAND factory with the Trump administration.

Dalian therefore sits within two linked plans: improving an existing Chinese production base and developing technology that could support American manufacturing. The proposed research permission and the discussions about a US plant remain steps under consideration, rather than completed investments.

How the American licensing rules changed

The Congressional Research Service documented the regulatory shift in its September 19, 2025, semiconductor export controls report. It said the United States removed designated Samsung and SK Hynix facilities in China from the validated end user program in September 2025, with the change taking effect on December 31, 2025.

That program, commonly called VEU, allowed designated facilities to receive certain controlled goods without a separate export license. The companies' Chinese plants had benefited from exemptions covering some equipment shipments. The CRS report also explains that restrictions expanded in 2024 to reach South Korean companies operating in China.

Washington subsequently granted annual equipment export licenses covering calendar year 2026, according to people familiar with that decision. The approvals were described as supporting continued operation and maintenance, rather than unrestricted expansion. Equipment such as American etching machines, which remove material during chip production, now moves under explicit authorization.

The Bureau of Industry and Security has continued to refer to its 2025 position: it intended to approve licenses supporting operation of existing factories, but not capacity expansion or technology upgrades. Samsung's statement that its work complies with the rules makes the terms of individual approvals especially important to the conversion plans.

The dates behind the factory changes

The current upgrades follow several years of changing ownership, equipment restrictions and investment. The next production milestones are Samsung's December 2026 target and its larger ramp scheduled for December 2027.

• 2021: SK Hynix acquired the Dalian factory through its purchase of Intel's NAND operations.
• 2022: The United States introduced controls on certain advanced chips and semiconductor manufacturing equipment exported to China.
• 2024: Washington expanded restrictions, including measures affecting South Korean chip companies operating in China.
• September 2025: Designated Samsung and SK Hynix facilities were removed from the VEU program, effective December 31, 2025.
• 2026: Annual licenses cover equipment shipments supporting the companies' Chinese operations.
• December 2026: Samsung targets monthly production of 5,000 wafers carrying its 286 layer V9 NAND at Xi'an.
• December 2027: Samsung targets 40,000 wafers a month for that product at Xi'an.

Annual licensing means equipment access must be considered alongside factory schedules. Samsung's reported ramp extends into 2027, beyond the calendar year covered by the 2026 approvals.

YMTC has moved ahead in China's NAND market

Omdia's figures show YMTC gaining ground while its Korean competitors lose share. YMTC held 38.5 percent of China's NAND market in the second quarter of 2026, compared with 28 percent across 2025. Samsung moved from 36 percent to 33.5 percent, while SK Hynix moved from 20 percent to 17 percent.

The comparison places a quarter beside a full year, but it shows the scale of the competitive shift. YMTC's latest share was 10.5 percentage points above its 2025 figure. Samsung and SK Hynix together accounted for 50.5 percent in the second quarter, down from their combined 56 percent in 2025.

YMTC also reached 14 percent of global NAND shipment volume, ranking third, according to Omdia figures. That global shipment measure describes a different market from the China figures, where the company now leads Samsung by five percentage points.

People familiar with YMTC's products say its range consists mainly of NAND with 160 and 232 layers, alongside a small amount with 294 layers. The company is also planning products with more than 300 layers. Its progress gives Samsung and SK Hynix a concrete reason to replace older technology in their Chinese factories.

The technology race extends beyond the Chinese plants

Samsung already sells NAND with up to 286 layers outside China and showed a prototype with more than 400 layers in August 2026. SK Hynix sells products with as many as 321 layers. Their planned Chinese upgrades would narrow a technology gap within their own manufacturing networks.

Samsung's Xi'an project would bring the factory to the layer count of its current commercial products elsewhere. SK Hynix's proposed move to at least 240 layers would advance Dalian beyond its present 192 layers, while its possible research on more than 300 layers would address a later generation.

Chinese memory development is also progressing beyond YMTC. ChangXin Memory Technologies, or CXMT, recently announced a new transistor architecture that it said could put it ahead of competitors. CXMT is another part of China's effort to build domestic memory capabilities, while YMTC is the direct NAND competitor driving the market changes facing Samsung and SK Hynix.

The CRS report describes American controls as serving economic and national security goals, including restricting access to advanced chip production and slowing capabilities that could support military uses. It also records a competing concern among some stakeholders: restrictions may encourage China to develop more technology domestically. The companies' factory decisions sit between those policy goals and the commercial need to keep their products competitive.

AI demand makes existing factories more valuable

Alibaba, ByteDance and Tencent have reportedly placed orders totaling $35 billion with Nvidia, which has struggled to meet Chinese demand. Those purchases concern processors used for computing, while Samsung's and SK Hynix's China upgrades concern the storage needed around computing systems. Both point to heavy spending on AI infrastructure.

The factory work follows a substantial increase in investment. Samsung and SK Hynix spent a combined 1.4871 trillion won at three Chinese plants in 2025, as detailed in March coverage of their increased China investment. Samsung raised spending at Xi'an by 67.5 percent, while SK Hynix more than doubled investment in Wuxi and increased Dalian spending by 52 percent.

Wuxi makes DRAM, the memory that holds information while a system is operating, whereas Xi'an and Dalian make NAND for persistent storage. The earlier investment therefore covered different parts of the memory supply chain rather than a single product.

New factories typically take three to five years to build, equip and bring into full production. Existing Chinese facilities offer an established manufacturing base that can respond sooner if equipment and conversion work proceed. For customers seeking more storage, the practical stakes are how quickly these plants can deliver newer products and how much storage each wafer can supply.

Key Points

• Samsung plans to convert Xi'an to 286 layer V9 NAND, with reported targets of 5,000 wafers a month in December 2026 and 40,000 in December 2027.
• SK Hynix is upgrading Dalian from 192 layers toward 240 layers or more and may seek permission for research on products exceeding 300 layers.
• Both companies say they are consulting Washington. Samsung says its project complies with US rules and does not expand factory capacity.
• Annual American equipment licenses replaced earlier exemptions after December 31, 2025.
• YMTC held 38.5 percent of China's NAND market in the second quarter of 2026, ahead of Samsung at 33.5 percent and SK Hynix at 17 percent.
• AI storage demand and stronger Chinese competition are increasing pressure to modernize factories that remain central to the Korean companies' businesses.