Samsung Electronics and SK Hynix are in the process of upgrading their manufacturing facilities in Xi'an and Dalian, China. Their goal is to produce NAND flash memory chips with an increased layer count, thereby countering the emerging competition from Yangtze Memory and fulfilling the escalating storage needs of the artificial intelligence industry. Both companies have affirmed that they are in constant dialogue with the U.S. authorities concerning these initiatives, though they have refrained from revealing detailed production strategies.

Samsung Electronics' Xi'an plant currently manufactures chips with around 200 layers, contributing to roughly 40% of its global NAND output. Following the upgrade, the plant will produce 286-layer V9 NAND flash memory chips, a project internally known as 'Monami'. The target is to achieve a monthly production of 5,000 wafers by December 2026, with an ambition to scale up to 40,000 wafers per month by December 2027. Samsung has underscored that this enhancement will not entail an expansion of production capacity or the construction of new manufacturing sites, but rather focuses on satisfying global customer requirements.

SK Hynix's Dalian facility, which currently produces items with approximately 192 layers, is set to manufacture NAND products with 240 layers or more post-upgrade. At present, the company has received authorization to produce chips with up to 240 layers in Dalian and may seek permission from the U.S. government to conduct local research and development on chips exceeding 300 layers, in anticipation of future production of such products in the United States. Concurrently, SK Hynix is in discussions with the Trump administration about plans to establish a new NAND factory in the U.S.

Since the implementation of the U.S. chip manufacturing equipment export control policy in 2022, both companies have been required to apply for annual licenses to install U.S.-made equipment in their Chinese factories. The U.S. Department of Commerce has previously indicated its intention to permit the two companies to continue operating their existing Chinese factories, but it does not plan to sanction applications for capacity expansion or technological upgrades. The degree to which export licenses for the equipment necessary for this upgrade will be granted remains unconfirmed.

Currently, Yangtze Memory's market share in China's NAND sector is on the rise, reaching 38.5% in the second quarter of 2026, surpassing that of Samsung. Yangtze Memory primarily produces 160-layer and 232-layer products, with a limited volume of 294-layer chips, and has plans to introduce products with over 300 layers. Samsung and SK Hynix have already introduced NAND chips with up to 286 layers and 321 layers, respectively, in markets outside China.