South Korean chip giant to sell Chinese factories? Official response

On Monday, US media China Standard Time that the future of South Korean chip giant SK Hynix's factory in the Chinese city of Dalian was in doubt because of US chip restrictions. US media believe SK Hynix may consider selling the factory. SK Hynix denies this. SK Hynix bought the Dalian Memory Chip factory from Intel for $9bn in 2020, hoping to expand capacity and expand into the cutting edge of China, the world's largest chip market. 

However, the Dalian plant is facing uncertainty as US chip restrictions affect SK Hynix's investment plans. For now, Intel's corporate logo still hangs on the navy-blue glass walls of its Dalian factory. SK Hynix is due to pay Intel the balance of its factory acquisition by 2025.

Last fall, SK Hynix received good news. The company, along with Samsung Electronics, another South Korean chipmaker, received an indefinite exemption from the US to import us chipmaking equipment for factories in mainland China. However, the exemption is not guaranteed for the long term, with foreign media saying they are concerned that Donald Trump, the frontrunner for the Republican Party presidential nomination, could win the November presidential election and return to the White House.

US media said SK Hynix may seek to cut its losses and sell the Dalian plant, but the decision is likely to still require US government approval as the US is unlikely to allow the plant to be sold to a Chinese bidder. Kwak Noh-jung, chief executive of SK Hynix, said at a press conference earlier this month that the US exemption“Significantly reduces” the risk of SK Hynix operating in China.

SK Hynix has denied rumours of a sale of the Dalian plant. “We are not even considering selling the Dalian Fab. SK Hynix will maintain its business in China and at the same time comply with the laws and regulations of the jurisdictions in which it operates in order to play its part in the development of the Semiconductor industry,” the company said.

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