Exclusive: SK hynix to Increase NAND Production in China by 50% SK hynix is resuming construction of its second NAND flash plant in Dalian, China, expanding its local production capacity by approximately 50%. Construction of the Dalian Fab 2 began four years ago but was suspended for an extended period following the memory market downturn. SK hynix plans to begin installing semiconductor production equipment by year-end and bring the fab into full operation in the first half of next year. According to semiconductor industry sources on August 11, Solidigm, the NAND subsidiary of SK hynix, resumed investment in Dalian Fab 2 in the first half of this year and restarted construction. Production equipment is expected to begin moving in as early as November, with the fab slated to establish a mass-production system and begin manufacturing NAND flash in the first half of next year. The new line is reportedly designed for monthly wafer input capacity of around 50,000 wafers. Combined with the existing Dalian Fab 1’s capacity of 100,000 wafers per month, this would increase SK hynix’s local production capacity by approximately 50%. Investment in Dalian is moving forward again after a four-year hiatus as the expansion of artificial intelligence data centers drives a surge in demand for enterprise solid-state drives, pushing NAND prices to nearly 10 times their level a year earlier. SK hynix launched Solidigm after acquiring Intel’s NAND business in 2021, taking over Dalian Fab 1 and the surrounding site before beginning construction of Fab 2 in May of the following year. However, the memory downturn and U.S. restrictions on exports of semiconductor manufacturing equipment to China brought progress to a halt, leaving only the fab’s structural framework completed. With the construction of Dalian Fab 2, SK hynix is pursuing a two-track NAND production and sales strategy. The company plans to manufacture lower-layer NAND based on mature technology in Dalian while concentrating production of advanced, high-layer-count NAND in Cheongju. Dalian is expected to focus on improving productivity for 100-layer-class NAND based on Intel’s mature floating-gate architecture, while production of NAND with more than 300 layers is expected to be concentrated at domestic facilities such as the M17 fab in Cheongju. The company previously announced that it would invest KRW 19.1 trillion in the Cheongju M17 fab, with plans to open its first cleanroom by the end of 2028 and manufacture next-generation NAND products there. “Dalian Fab 2 is planned to use the same equipment configuration as Fab 1,” an industry source said. “My understanding is that it will have monthly wafer input capacity of between 40,000 and 60,000 wafers.”