Samsung and SK Hynix Raise China Chip Investments in 2025
Samsung Electronics and SK Hynix invested a combined 1.5 trillion won in their chip operations in China in 2025 as both companies pushed to draw more supply from existing facilities. The move comes as AI-driven demand continues to tighten the global memory market.
Samsung invested 465.4 billion won in its Xi'an NAND flash plant, up 67.5 percent from 277.8 billion won in 2024. Xi'an is Samsung's only overseas memory fabrication plant and produces about 40 percent of the company's total NAND output.
SK Hynix also sharply increased spending across its Chinese facilities. Its Wuxi DRAM plant received 581.1 billion won, marking a 102 percent increase year over year. At its Dalian NAND plant, investment rose 52 percent to 440.6 billion won. This was the first time since the 2022 acquisition of Intel's Dalian NAND plant that SK Hynix's China investments reached the trillion-won level.
Xi'an NAND Upgrade Focuses on 236-Layer Production
Samsung Shifts From 128-Layer to 236-Layer NAND
The spending at Xi'an is centered on technology upgrades rather than simple capacity expansion. Samsung is moving the production line from 128-layer NAND to 236-layer NAND, and mass production of the newer chips has recently begun.
Samsung had largely held back investment at the Xi'an plant from 2020 through 2023 after spending 698.4 billion won there in 2019. The latest increase signals a return to heavier investment, but with a clear focus on improving process technology inside an existing operation.
SK Hynix Upgrades DRAM and NAND Operations
SK Hynix followed a similar approach. At Wuxi, the company upgraded its process from third-generation 10-nanometer-class DRAM to fourth-generation technology. That change supports production of DDR5 and other higher-value memory products.
Together, these investments show a clear pattern: both companies are using current Chinese sites to improve output quality and supply responsiveness without waiting for entirely new plants to come online.
Why Existing China Plants Offer a Faster Supply Response
Upgrading Existing Fabs Is Faster Than Building New Ones
The strategy reflects a practical timing advantage. Building new fabrication plants typically takes three to five years, while optimizing existing production bases in China allows a much faster response to supply needs.
That matters in a market where demand is already under pressure. AI-related growth has added strain to memory supply, pushing manufacturers to find the quickest path to more advanced output.
Memory Shortage Pressure Continues to Build
The urgency behind these investments is reinforced by broader supply concerns. SK Group Chairman Chey Tae-won said the global wafer shortage exceeds 20 percent and is likely to continue until 2030.
At the same time, server memory chip prices jumped between 60 and 76 percent in the fourth quarter of 2025. That price surge adds another sign that supply remains tight and that faster upgrades at existing facilities can have immediate strategic value.
China Remains Central to Samsung and SK Hynix Memory Output
China still holds an important place in both companies' memory production footprints. Estimates put China at 30 to 35 percent of Samsung's NAND output and 40 to 45 percent of SK Hynix's output.
Those figures help explain why both companies are committing substantial capital to facilities in Xi'an, Wuxi, and Dalian. These are not marginal sites. They are core parts of each company's supply network.
U.S. Export Controls Still Shape China Chip Investment Plans
Equipment Shipments Continue Under Annual Permits
The renewed spending is happening under continuing geopolitical limits. U.S. export controls on advanced chipmaking equipment for China remain in place.
Washington ended indefinite license exemptions in 2025, but later granted annual permits for 2026. That gave Samsung and SK Hynix a defined period in which they could continue shipping tools to their facilities in China.
Investment Continues Despite Policy Constraints
Even with those restrictions, the investment trend shows that both companies still see strong value in upgrading their Chinese operations. Rather than stepping back, they are working within the available window to improve technology at plants that already contribute heavily to global memory supply.
Samsung and SK Hynix Use China Facilities to Meet AI Memory Demand
The broader pattern is straightforward: instead of waiting years for new fabs, Samsung and SK Hynix are using existing Chinese plants to speed up advanced memory production.
For Samsung, that means mass-producing 236-layer NAND at Xi'an. For SK Hynix, it means process improvements at Wuxi and continued investment in Dalian. In both cases, the goal is to respond faster to a market under pressure from AI demand, higher-value memory requirements, and ongoing supply constraints.