Samsung Electronics and SK Hynix are planning upgrades to their Chinese manufacturing plants to produce more advanced NAND flash memory, as competition with domestic rival Yangtze Memory Technologies (YMTC) intensifies and demand from AI data centers grows, Reuters reported.

NAND flash is a type of non-volatile storage used in smartphones, PCs, and data centers, and manufacturers compete by stacking memory cells vertically — the more layers, the greater the storage density on each wafer.

Inside the 'Monami' conversion at Xi'an

Samsung is targeting its Xi'an plant in northwestern China for an upgrade to 286-layer V9 NAND by 2027. The project is internally codenamed "Monami," which means "my friend" in French.

Production is expected to ramp up gradually, reaching 5,000 wafers per month by December 2026 and 40,000 wafers per month by December 2027, Reuters reported, citing a person familiar with the plans.

The Xi'an facility currently produces NAND chips with around 200 layers and accounts for roughly 40% of Samsung's global NAND output. Samsung said the upgrade complies with U.S. export controls and will support customers worldwide, including in the United States, without expanding production capacity or requiring new buildings.

SK Hynix pushes Dalian facility past 192 layers

SK Hynix is upgrading its Dalian plant in China, attempting to push the fab past 192-layer NAND, with production targeting 240 layers or more.

The facility became part of SK Hynix in 2021 through its acquisition of Intel's NAND business, which now operates as Solidigm. Solidigm is currently preparing for a U.S. IPO, while Dalian remains its only NAND manufacturing site.

China accounts for an estimated 30% to 35% of Samsung's NAND output and 40% to 45% of SK Hynix's, according to TrendForce. Keeping their Chinese plants competitive with the latest technology is therefore crucial for both chipmakers.

YMTC is the reason

YMTC strengthened its position in China's NAND flash market in the second quarter of 2026, taking a 38.5% share to move ahead of Samsung, which held 33.5%. SK Hynix ranked third with 17%, according to figures cited by AI Weekly.

The latest figures mark a gain for YMTC, which accounted for about 28% of the market over the full year in 2025.

YMTC is also advancing its chip technology. Although its product lineup remains dominated by 160-layer and 232-layer NAND chips, the company has started producing 294-layer chips in small volumes and is looking at moving beyond 300 layers, according to Reuters.

Samsung and SK Hynix remain ahead in the latest NAND technology, with Samsung producing 286-layer chips globally and SK Hynix already mass-producing 321-layer NAND. Their Chinese facilities, however, still lag behind these advancements.

The US license question

U.S. export controls remain a hurdle for Samsung and SK Hynix, which need annual licenses to install American-made equipment at their Chinese plants. In 2025, Washington signaled it was unlikely to approve technology upgrades or capacity expansions at the facilities.

That stance has since softened, with both companies receiving annual licenses for 2026 that replace the waivers previously used to keep their Chinese plants running, AI Weekly reported. However, Reuters said it could not confirm how much of the equipment required for the upgrades had been approved. Because those licenses come up for renewal every year, Washington's future approvals will be a recurring checkpoint for both companies' 2026 and 2027 ramp timelines.