By Karen Freifeld
Nov 3 (Reuters) - US officials have held up approval for American chipmaking equipment needed by SK Hynix to expand production in China, complicating the South Korean chipmaker's plans for new memory-chip plants in New York, according to people familiar with the matter.
SK Hynix is seeking US export licenses to equip its Dalian plant, arguing that increased production there would help fund its planned US expansion. But the Commerce Department has yet to approve the new licenses, the people
said.
Its Solidigm unit plans to invest about $45 billion and build two NAND plants in Marcy, New York, two people said, with investment potentially reaching about $100 billion over time. NAND is memory that retains data even when power is turned off and is used for storage in data centers.
TRUMP ADMINISTRATION FACES POLICY DILEMMA
The negotiations raise questions about how far the Trump administration is willing to bend national security guardrails established to keep US technology from aiding China's military, in order to bring foreign investment and chipmaking onshore.
"Ultimately, none of this is going to go forward without a green light from the White House," said Leland Miller, a member of the US-China Economic and Security Review Commission, a bipartisan panel created by the US Congress. The White House did not immediately respond to a request for comment.
Negotiations are continuing, the people said, with approval for the Dalian expansion central to SK Hynix's plans in New York.
COMMERCE DEPARTMENT MEETINGS INTENSIFY
Executives from SK Hynix's US subsidiary, Solidigm, have met nearly 10 times with officials from the Commerce Department since late August, one of the people said. The company needs to ramp up production and develop more sophisticated NAND chipmaking in China to generate revenue to build a US facility and to stay competitive, the people said.
In a meeting last week, Commerce Under Secretary Jeffrey Kessler held to his position that the US would not allow more American chipmaking tools to upgrade or expand capacity, the person said, though the department has not formally denied a license to export American equipment to fill empty clean space in Dalian. The two sides are also negotiating a separate license for 2027 for equipment to keep up the Dalian facility, the person said.
A spokesperson for the Department of Commerce did not immediately respond to a request for comment.
In a statement last week, Solidigm said: "As a US-founded and headquartered company, Solidigm regularly evaluates strategic alternatives to best serve its customers and enhance its long-term competitiveness. The company is currently exploring options for building a NAND memory fab at potential locations around the world. No decision regarding any specific course of action has been made." Solidigm stuck to its statement from last week. SK Hynix did not immediately respond to a request for comment outside business hours.
(Reporting by Karen Freifeld in New York; Editing by Chris Sanders and Matthew Lewis)
