According to reports from Korean media on August 11, as cited by China News Service, SK Hynix has kicked off construction again on its second NAND flash memory fab in Dalian, China, aiming to boost production capacity there by around 50%. The Dalian Fab 2 project broke ground four years ago but had been stuck in limbo due to the memory sector’s downturn. SK Hynix now plans to bring in semiconductor manufacturing gear before the end of this year, with mass production targeted for the first half of next year.
Back in 2021, SK Hynix established Solidigm after acquiring Intel’s NAND business, taking over the Dalian Fab 1 and its facilities, and then kicked off the second fab’s construction in May of the following year. Word has it the new line is designed for a wafer input volume of roughly 50,000 wafers per month. Adding that to Fab 1’s existing 100,000 monthly wafers, the total output in Dalian is set to jump by about 50%.
The news of SK Hynix breathing life back into the Dalian Fab 2 project is yet another sign that the semiconductor industry is riding a wave of high prosperity. Analysts believe storage supply chain partners are in a sweet spot to reap significant rewards—especially equipment and materials players, who can expect a fresh round of order growth. In the long run, this is a solid boost for China’s domestic storage industry ecosystem, accelerating the localization push.
With AI driving a relentless climb in global semiconductor equipment spending, domestic equipment makers are staring down a historic breakthrough window. According to China Merchants Securities, external tech restrictions combined with the urgent need for supply chain self-reliance are pushing local wafer fabs to speed up the adoption of homegrown equipment. Domestic equipment manufacturers have already moved past single-point tech wins into a phase of platform-level expansion, picking up the pace across product line diversification, customer validation, and system integration capabilities. Semiconductor equipment—one of the most strategically vital and clearly defined links in the domestic substitution chain—is sitting right at an inflection point for structural growth.
Earlier this month, SK Hynix locked in a fresh round of capacity expansion plans. According to official filings, the company’s board has greenlit a combined investment of roughly 54.3 trillion Korean won in domestic projects. Of that, 35.2 trillion won is earmarked for the second-phase wafer fab (Y2) at the Yongin semiconductor cluster, with an investment timeline stretching to 2031; the remaining 19.1 trillion won will go toward the M17 chip plant in Cheongju, also with a horizon through 2031. Both initiatives are part of the company’s mid-to-long-term investment strategy unveiled back in June.
Looking at the bigger picture, SK Hynix plans to pour a cumulative 600 trillion won into the Yongin semiconductor cluster and 100 trillion won into the Cheongju production base. At this point, the first-phase Y1 wafer fab in Yongin is still under construction. The company notes that in the AI era, technical edge alone isn’t enough to keep a competitive lead—what truly matters is delivering enough product at the exact moment customers need it. This investment decision, they say, stems from a thorough assessment of market demand, with the goal of ensuring mid-to-long-term capacity keeps pace with the memory market’s growth rhythm.
To bankroll this massive expansion, SK Hynix went public on the Nasdaq in the U.S. on July 10, raising $26.5 billion through an American depositary share offering—the largest IPO by a foreign company on U.S. soil. The proceeds are largely slated for building the first-phase wafer fab at the Yongin semiconductor cluster, an advanced packaging plant in Cheongju, and purchasing EUV lithography gear.
Rumor has it that with the Dalian Fab 2 coming on board, SK Hynix has settled on a two-track strategy for NAND flash production and sales: the Dalian plant will mass-produce lower-layer-count flash memory using mature processes, while the Cheongju facilities in Korea handle advanced high-stack flash. The Dalian line will focus on churning out Intel’s mature floating-gate (FG) architecture flash at the 100-layer level, maximizing output from tried-and-true manufacturing tech. As for ultra-high-stack premium NAND at 300 layers and above, that’s staying exclusively at home in Cheongju’s M17 plant and other Korean fabs.
Riding the broad upswing in the global memory chip market, SK Hynix’s earnings are on fire. The company’s latest financial report shows first-half cumulative revenue cracking the 100 trillion Korean won mark for the first time ever. Compared to the same period last year, revenue and operating profit surged 257% and 557%, respectively. The company forecasts that memory demand growth is set to continue. Based on that demand outlook, SK Hynix is in talks with customers on multi-year contracts to lock in stable mid-to-long-term supply. So far, it’s wrapped up discussions on long-term supply agreements with over a dozen clients, including core ones, and is actively negotiating with more major players in the industry.
SK Hynix is also showering shareholders with generosity. On August 7, it disclosed on the Korea Exchange that it will pay out a dividend of 375 Korean won per share (roughly 1.8 yuan) to common shareholders, a market yield of 0.02%, totaling 273.325 billion Korean won (about 1.3 billion yuan). The record date is set for August 31, with payments to be made within one month of that date. SK Hynix says it’s actively exploring additional shareholder return measures to boost value, with details planned to be finalized and announced in the third quarter.
