MediumV Technology Geopolitics & AI3 November 2026, Tuesday
US holds back equipment licences for SK Hynix's Dalian expansion
According to a Reuters report on 3 November, the US Commerce Department has neither approved nor rejected the licences SK Hynix requested for US-made equipment to expand its NAND fab in Dalian, China. That leaves the financing of the company's 45-billion-dollar plan in New York uncertain.
According to the Korea Times on 4 November, the US revoked SK Hynix's validated end-user status at the end of 2025 and replaced it with an annual licence. The annual licences permit specified equipment in 2026 up to a quantity cap, but exclude technology upgrades and capacity increases. The company argues that it wants to install equipment in an empty clean room at its 2nd Dalian fab and is not building a new facility.
According to Nocut News, Solidigm, SK Hynix's US unit, has met the Commerce Department about 10 times since August 2025. At 1 meeting last week, Under Secretary of Commerce Jeffrey Kessler reiterated that no additional US equipment would be allowed for capacity increases or upgrades. The two sides are also negotiating the licence Dalian needs to operate in 2027.
Solidigm is pursuing a 45-billion-dollar plan for 2 NAND fabs in Marcy, New York; according to the sources, the sum could eventually rise to 100 billion dollars. The industry had expected Dalian's profits to finance the 45-billion-dollar investment. SK Hynix suspended its review of a Solidigm IPO on 23 October and said in a filing on 29 October that no final decision had been made.
Talay assessment
Bottom line
Despite an allied company's pledge to invest 45 billion dollars in the US, Washington is not giving ground on physical capacity in China. The hardware door is shut even to 1 clean room while the cloud door remains legally open, and that is the real asymmetry in the export regime. The most likely path is for the 2027 licence to be granted at operating level, with the expansion left in limbo.
Likely effects
- NAND supplyNegative1–6 months
If the Dalian expansion stalls, SK Hynix will have to add NAND capacity outside China through more expensive investment.
- US industrial policyNegative6 months+
If financing that relies on Dalian's profits weakens, the timing of the 45-billion-dollar New York plan could slip.
- Korea–US relationsUncertain1–6 months
The lack of an outcome after about 10 meetings hardens Seoul's bargaining over an allied exemption.
Possibilities, ranked
- 1Operating licence granted, expansion on hold60%
Commerce grants the 2027 operating licence but does not approve the second-fab expansion.
Watch: The Commerce Department's decision on the 2027 annual licence
- 2Partial approval through bargaining25%
Limited equipment approval is granted in return for the New York investment.
Watch: Solidigm's final decision announcement on the New York fab
- 3Outright refusal15%
Commerce formally rejects the request, and SK Hynix cancels the Dalian plan.
Watch: A regulatory filing from SK Hynix
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Solidigm US plan▼ $45bn
- Meetings with Commerce▼ ~10