South Korean chip maker SK Hynix denies reports it is selling firm’s Dalian flash memory fab, assuring construction to be completed

South Korean memory chip maker SK Hynix has denied reports that it plans to dispose of its new semiconductor fabrication plant in Dalian, a port city in northeast Liaoning province, amid US-led restrictions on exports of hi-tech manufacturing equipment to China.

Earlier this month, SK Hynix was reported by South Korean media outlet The Elec to be delaying construction and considering the sale of its Dalian 3D NAND flash memory factory, which the Seoul-based company acquired for US$9 billion from Intel Corp in December 2021, in light of trade restrictions and slumping demand in the global memory chip market.

The speculation reflects lingering uncertainty over the future of South Korean chip makers Samsung Electronics and SK Hynix’s investments on the mainland, as Washington exerts pressure on Seoul and other economic allies to isolate China from global tech supply chains.

The US has asked South Korea to press its chip makers not to fill any market gap in China if Beijing bans American semiconductor firm Micron Technology from selling its products on the mainland, according to a report on Sunday by the Financial Times, which cited people familiar with the talks. Chinese regulators launched a cybersecurity review into Micron in March.

US President Joe Biden’s administration had earlier secured in January an agreement with the Netherlands and Japan to restrict exports of some advanced chip-making machinery to China.