SK Hynix will postpone the volume production of its second NAND plant in Dalian, northeastern China, according to reports from Korean news media.
The Elec recently reported, citing industry sources, that the Korean memory supplier is set to postpone the mass production of its new China plant in response to worsening memory market demand and US restrictions on exports of advanced semiconductor equipment to China.
Construction of the plant, designed to mass produce 3D NAND flash chips, kicked off in May 2022 and was originally slated for completion in April-May 2023. But the construction has not neared the completion stage, and the company also has yet to discuss related delivery and installation issues with equipment suppliers, according to supply chain sources.
The sources said SK Hynix has cut its capex budget for 2023 by around 50%, compared to the 2022 level, to counter sluggish market demand. It thus has no other choice but to flexibly adjust the construction schedule for the second Dalian plant.
The capex downward adjustment has a lot more to do with the US trade curbs on China, the sources said. In October 2022, the US announced strict restrictions on China-bound shipments of manufacturing equipment for sub-18 nm DRAM chips, NAND flash with 128 layers and above and sub-14nm logic ICs. Both Samsung Electronics and SK Hynix were granted a one-year grace period for the export control measure, and it remains to be seen whether the buffer period will be extended or not after expiration.
If the grace period fails to be extended, SK Hynix will have to complete taking delivery of related equipment from the US and its other allies before October this year, which is basically impossible to complete, the sources said.
Even if the buffer period can be lengthened for one year or more, the company will still find it practically impossible to bring equipment into the new Dalian plant in the medium and long term, after taking into consideration follow-up needs such as equipment maintenance. US engineers are now also prohibited from providing services to semiconductor plants in China.
Article translated by Willis Ke
