On September 18, 2026, Reuters reported that SK hynix Inc. (NASDAQ:SKHY)’s US subsidiary Solidigm is considering building a NAND flash memory chip factory in the United States, with upstate New York emerging as a leading candidate, as the company faces growing pressure from the Trump administration to expand domestic semiconductor manufacturing. The project would be separate from SK Hynix’s ongoing discussions to produce memory chips at Intel’s Ohio facility, and no agreement has yet been reached.
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Bull Case
A U.S. factory would reduce Solidigm’s heavy exposure to China and protect its access to American customers. Solidigm currently operates its only NAND production facility in Dalian, leaving the business vulnerable to U.S. tariffs and restrictions on exports of chipmaking equipment to China. American production would diversify that footprint and help SK hynix Inc. maintain supply for U.S. data-center customers as Washington tightens semiconductor controls.
The project would give SK Hynix more capacity during a severe AI-driven memory shortage. AI servers have raised demand for both working memory and data storage. Manufacturers have prioritized DRAM and high-bandwidth memory spending over NAND capacity. Industry executives expect memory constraints to persist through at least 2027. It gives Solidigm a favorable demand backdrop if it can bring new capacity online before the market cycle turns.
A U.S. plant could strengthen Solidigm after years of losses and support SK Hynix’s expansion strategy. SK Hynix has struggled to generate consistent returns from Solidigm since agreeing to acquire Intel’s NAND business for $9 billion in 2020. A facility closer to major cloud and AI customers could help Solidigm narrow its market-share gap with Samsung, counter emerging Chinese competition and improve the investment case for any future Solidigm fundraising or listing.
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Bear Case
SK hynix Inc. has not committed to the project or disclosed its likely cost, capacity, or construction schedule. The company said Solidigm continues to review several options. Reuters’ sources said the parties had not reached an agreement and continued discussing key details. Semiconductor factories require years of construction and substantial capital, so investors cannot yet assign meaningful production or revenue benefits to the proposal.
Higher American manufacturing costs and an uncertain memory cycle could weaken the project’s returns. U.S. semiconductor production carries significantly higher labor, construction and supply-chain costs than manufacturing in South Korea or China. A new factory would also begin production years from now. Reuters noted that concerns about slower frontier-AI development have clouded long-term memory demand. SK Hynix could add expensive capacity after current shortages ease.
SK Hynix must balance growing Chinese competition against conflicting demands from Washington and Seoul. China’s state-backed CXMT plans a NAND research and trial-production line, although it has not committed to commercial-scale manufacturing. At the same time, Washington has threatened tariffs of up to 100% without more U.S. production. Seoul wants SK Hynix to accelerate domestic investment. Reuters noted that a Solidigm NAND plant may face less resistance than moving sensitive HBM or DRAM technology to Intel’s Ohio facility. However, the political conflict could still complicate capital allocation.
Conclusion
A U.S. NAND factory would give SK hynix Inc. a valuable hedge against tariffs, export restrictions, and Solidigm’s reliance on a single Chinese production facility. Strong AI-related storage demand and persistent memory shortages also create a favorable environment for expanding capacity. However, SK Hynix has not approved the project, and U.S. manufacturing costs could make the plant financially unattractive if NAND supply catches up before production begins. Investors should watch for a formal commitment, government incentives, customer purchase agreements, and detailed capital-spending guidance.
Until SK Hynix provides those details, the proposal keeps the company’s strategic positioning solid but does not yet justify higher earnings estimates.
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