SK Hynix is reportedly delaying the completion of its second 3D NAND facility in Dalian, China. The decision is reportedly in response to shrinking memory market demand and US restrictions on exporting advanced manufacturing tools to China. Digi Times, citing South Korean media. Moreover, due to problems with importing wafer fab equipment to China, SK Hynix even sells finished fab shells before transferring wafer fab equipment.
SK Hynix acquired Dalian site with memory fab by taking over Intel’s 3D NAND production and SSD business in 2021. In May 2022, the company will started to build Additional fabs on site after Intel has done all the heavy lifting, including infrastructure, planning, and permits from local authorities. Building a fab shell typically takes about a year. However, according to sources familiar with the matter cited by the media, construction is not yet nearing the final stages and talks about delivery and installation have not yet taken place with wafer fab suppliers. In the worst case, SK Hynix may decide to sell the building instead of installing expensive tools.
There are several factors that influence SK Hynix’s decisions regarding fab outfitting.
First, U.S. wafer fab equipment (WFE) makers must obtain a special export license from the U.S. Department of Commerce to export tools to China that can be used to manufacture 3D NAND with 128 layers or more. To make the fab competitive in the long run, SK Hynix needs to target the 200 or 300 layer 3D NAND production node.
Officially, both Samsung and SK Hynix have obtained exemptions from the US government to export necessary production equipment to China from October 2022 to October 2023. However, it is unclear if this period will be extended by another year.
Due to long lead times, it will not be possible to bring all the tools into China by October 2023, nor will it be possible to obtain the necessary WFEs by October 2024, media reports said. claim. Additionally, American engineers at companies such as Applied Materials, KLA, and Lam Research are barred from servicing Chinese semiconductor facilities without an export license from the government, so they can even install procured tools. can be a problem.
Second, even if SK Hynix manages to bring and install all the necessary tools in China, it still needs to fab. This means that we may export additional components from the US, Europe and Japan and employ US engineers. Maintain WFE.
Finally, sluggish demand for 3D NAND and DRAM required SK Hynix to slash its 2023 capex budget by about 50% compared to 2022 and flexibly adjust the construction schedule for its Dalian fab. As a result, the company may not have enough cash to invest in its Chinese fab. Another large fab under construction in South Korea.
As a result, some industry insiders have speculated that SK Hynix may sell its new Dalian fab directly to a Chinese company without installing equipment after construction is complete.
