Reuters posted its exclusive on X at 19:30 UTC on 3 November, with the headline that SK Hynix’s New York chip plans hit a snag over US restrictions on China. This piece is built on that report, checked against the BIS rule and SK hynix’s SEC filings.
SK hynix’s plan for memory plants in New York has run into Washington’s China export controls, Reuters reported on 3 November, citing people familiar with the matter: the US has not yet approved the export licences for American tools that SK hynix wants in order to expand its Dalian, China plant. The company says extra Dalian output would help pay for the US build, according to the people.
SK hynix’s own numbers show how much is at stake in China. By our arithmetic from its US prospectus, China held 12.1% of SK hynix’s non-current assets at 31 March 2026, down from 18.3% at the end of 2024, while its China-located sales entities booked 24.3% of first-quarter revenue.
Business Pill · The Memory Wall
An evergreen Business Engineer explainer on why memory bandwidth, not chip speed, sets the pace of AI. It teaches the general idea only and does not discuss SK hynix, Solidigm or export licences.
The key insight: By our arithmetic from SK hynix’s SEC prospectus, China held 12.1% of its non-current assets at 31 March 2026, down from 18.3% at the end of 2024, while China-located sales entities booked 24.3% of first-quarter revenue; Reuters reports the US has yet to approve the Dalian licences SK hynix ties to New York.
What Reuters Reported
According to two people cited by Reuters, Solidigm, SK hynix’s US subsidiary, plans to invest about $45 billion and build two NAND flash plants in Marcy, New York, with the investment potentially reaching about $100 billion over time. Approval for the Dalian expansion is central to those plans, and negotiations are continuing, the people said.
Solidigm executives have met Commerce Department officials nearly 10 times since late August, one person told Reuters. The people said the company must grow and modernise its NAND output in China both to fund a US plant and to keep pace with rivals.
Commerce Under Secretary Jeffrey Kessler stuck to his view at a meeting last week that Washington would not let more US chipmaking tools be used to upgrade or expand capacity, that person said. The department has not formally denied a licence to ship US equipment to fill empty clean-room space in Dalian, according to the same person, and the two sides are also negotiating a separate licence for 2027 for equipment to keep the Dalian plant running.
“Ultimately, none of this is going to go forward without a green light from the White House,” Leland Miller, a member of the U.S.-China Economic and Security Review Commission, told Reuters. The White House and the Commerce Department did not immediately respond to Reuters’ requests for comment. Solidigm repeated a statement from last week that “No decision regarding any specific course of action has been made.” SK hynix did not immediately respond outside business hours, Reuters said.
Share of SK hynix revenue booked by China-located sales entities (as reported) and share of its non-current assets located in China (our arithmetic), from its SEC prospectus of 10 July 2026. Revenue points are full years 2024 and 2025, then the first quarter of 2026; asset points are year-end and 31 March 2026.
The Licence Behind the Snag
The licences exist because of a rule the Bureau of Industry and Security published in the Federal Register on 2 September 2025. It removed Intel Semiconductor (Dalian) Ltd, Samsung China Semiconductor Co. Ltd and SK hynix Semiconductor (China) Ltd from the Validated End-User programme, effective 31 December 2025. Validated end-users could receive eligible US items under a general authorisation instead of a licence.
In the rule, BIS estimated that removing these entities would lead to an additional 1,000 licence applications a year.
SK hynix’s prospectus, filed with the US Securities and Exchange Commission on 10 July 2026, describes what replaced the old status. Instead of the VEU framework, BIS set up an annual approval mechanism under which SK hynix submits yearly plans for the US-origin equipment it expects to need. In December 2025, BIS granted it an annual licence for 2026 to ship approved US-origin equipment to its China facilities, the prospectus says. It warns that failure to obtain the required licences in a timely manner “may materially impact our manufacturing operations in China.”
How Much of SK Hynix Sits in China
The prospectus lists nine fabs as of 31 March 2026, by our count: six in Korea, at Icheon and Cheongju, and three in China, two DRAM fabs in Wuxi and the Dalian NAND fab, which SK hynix bought from Intel in December 2021.
SK hynix reports non-current assets by the location of the parent and its subsidiaries. Assets in China were 10.9 trillion won of 90.0 trillion won at 31 March 2026, the prospectus shows; by our arithmetic, that is 12.1%, against 12.3% at the end of 2025 and 18.3% at the end of 2024. Assets in the US were 0.8 trillion won.
Revenue tells a different story. Sales entities located in China accounted for 24.3% of revenue in the first quarter of 2026, up from 19.7% for 2025, according to the prospectus; the figure was 23.5% in 2024 and 30.9% in 2023. These are revenue by the location of the selling entity, not by where chips are made. SK hynix had 11,333 full-time employees in China and 591 in the US at 31 March 2026, it says.
For the Intel NAND business, including the Dalian plant, SK hynix paid $6.6 billion in December 2021 and $2.2 billion in March 2025, the prospectus says. By our arithmetic, that is $8.8 billion in total; the $45 billion reported for New York would be about five times that.
What SK Hynix Has Disclosed
SK hynix has not confirmed a New York plant. In a 6-K filed with the SEC on 29 October, it responded to a Maeil Business Newspaper report that Solidigm was pursuing an investment of about 60 trillion won in a new US NAND plant. It said Solidigm is reviewing various measures to strengthen its competitiveness and expand its production capacity, but that no matters had been determined.
The company said it would make a further disclosure either when specific details are confirmed or within one month of the date of that report.
The Thread So Far
Bloomberg first reported on 27 October that Solidigm was in talks on a $45 billion US plant and wanted permission to upgrade Dalian; we covered it as Solidigm floats a $45B US plant for a China upgrade, and updated that piece on 3 November when Seoul Economic Daily named the Marcy NanoCenter as the likely site.
As we read the filings, the licence question sits under every China fab: since the validated end-user status ended on 31 December 2025, the prospectus says SK hynix files a yearly equipment plan and needs an annual US licence.
As we read Reuters’ account, two licences are in play: one to expand Dalian or fill its empty clean-room space, which the people say has not been approved, and a separate 2027 licence to keep the plant running, which is still being negotiated.
As we read the prospectus tables, China’s share of SK hynix’s non-current assets fell by about a third in 15 months, while the share of revenue booked by its China sales entities rose back to 24.3% in the first quarter.
SK hynix prospectus, 10 July 2026
“Failure to obtain the required licenses in a timely manner may materially impact our manufacturing operations in China, which in turn may have a material adverse effect on our business, financial condition and results of operations.”
Three Implications
FOR SK HYNIX Its 29 October 6-K said it would make a further disclosure on Solidigm’s plans when details are confirmed or within one month.
FOR WASHINGTON Reuters reports that Kessler held to his position on tools for upgrades or expansion, and Leland Miller told Reuters that none of it goes forward without a White House green light.
FOR NEW YORK Reuters’ sources describe two NAND plants in Marcy at about $45 billion, possibly about $100 billion over time; Solidigm says no decision has been made.
The framework, written about critical minerals and processing, puts it this way: “It’s a fundamental constraint on the speed of AI transformation, and it’s creating geopolitical leverage that operates independently of who has the best models.”
As we read it, the Dalian licence is that kind of leverage applied to chip tools: the decision on SK hynix’s China capacity sits with US officials, not with its customers. The framework does not discuss SK hynix, Solidigm or export licences.
What Is Not Established
Reuters’ account rests on unnamed people familiar with the matter, and the Kessler meeting comes from one person. The Commerce Department has not commented, and it has not formally denied a licence, according to Reuters. Neither SK hynix nor Solidigm has announced a New York plant, a site or an investment amount; Solidigm says no decision has been made.
The prospectus does not say how much US equipment the 2026 licence covers or what SK hynix applied for. The asset and revenue shares above use different bases, and the 12.1% and 18.3% shares are our arithmetic from the prospectus tables. We did not contact SK hynix, Solidigm or the Commerce Department.
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Reuters reports that the US has yet to approve the Dalian equipment licences SK hynix ties to a $45 billion Solidigm plan in New York. Since its validated end-user status ended on 31 December 2025, SK hynix has needed an annual US licence to equip its China fabs, which by our arithmetic hold 12.1% of its non-current assets, while China-located sales entities booked 24.3% of first-quarter revenue.
A note on sourcing. This piece is based on Reuters’ report of 3 November 2026, which we paraphrase, the Bureau of Industry and Security rule published in the Federal Register on 2 September 2025, and SK hynix’s SEC prospectus of 10 July 2026 and 6-K of 29 October 2026. The asset shares, the fab count and the $8.8 billion total are our arithmetic from the prospectus. We did not contact SK hynix, Solidigm or the Commerce Department.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
