Skip to content

SK Hynix Considers Abandoning Fab Factories in China

Chinese online high-tech news site ICS Smart recently reported that major South Korean memory chip maker SK Hynix just reported its poor third-quarter results. To make matters worse, SK Hynix has doubts about the future fate of its fab factories in China due to new US export control regulations. The company explained that, due to the deteriorating global macroeconomic environment, sluggish demand for DRAM and NAND products, sales and prices have declined, resulting in a sharp decline (-20.5 percent) in revenue month-over-month. Also, on October 7 this year, the United States issued new export control regulations against China, restricting wafer manufacturers located in China from obtaining multiple advanced chip technologies, unless licensed by the U.S. Department of Commerce. This impacts the fab factories of Korean companies such as SK Hynix and Samsung in China. Although on October 11, SK Hynix and Samsung Electronics both obtained a license from the US Department of Commerce for an additional year, yet after that, what will happen? SK Hynixs’ chief marketing officer Kevin Noh said on a conference call that, as a contingency plan, the company is considering selling fab factories, selling equipment, or moving equipment to Korea. Records show that, as of 2020, SK Hynix had invested more than US$20 billion in China. Under the new U.S. regulations, the operation of SK Hynix in China will be subject to many restrictions.

Source: ICS Smart, October 26, 2022