After NAND surged 70% in a single quarter, SK Hynix restarted Phase II in Dalian, accelerating competition with Samsung in Xi'an.

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According to TrendForce, SK Hynix plans to restart the previously suspended second-phase expansion project of its Dalian factory in the second half of 2026, adding a new V8 (238-layer) NAND production line. The project was previously paused due to the sluggish NAND market and U.S. export controls; the restart marks the company's transformation of a historic recovery in NAND prices into actual capacity deployment.

According to News Tomato, SK Hynix will begin installing production equipment at the Dalian second-phase plant in the second half of this year, with facility construction to be completed in stages by the first half of 2027. Domestic partners have already started relocating idle NAND equipment to Dalian, and overseas suppliers are reportedly receiving preliminary purchase orders for equipment delivery.

Sisa Journal further disclosed production details: The second phase of the Dalian factory will add a V8 production line (238 layers) with a monthly capacity target of 30,000 to 50,000 wafers. The first-phase factory is currently converting its production lines to 192-layer NAND and replacing aging equipment.

The turning point behind the suspension: From export controls to annual approvals

The Dalian second-phase expansion previously stalled for two main reasons: First, uncertainty over U.S. export controls on semiconductor equipment to China; second, the continued downturn in the NAND market.

On the regulatory side, a key variable has changed. According to News Tomato, the U.S. has adjusted the previous "Validated End User" (VEU) system to an annual approval process for equipment transportation, easing uncertainty in equipment supply and providing operational space for SK Hynix to restart Dalian's expansion.

The timing of this system change is noteworthy. Against this backdrop, the market is watching whether SK Hynix can leverage the boom in DRAM and HBM to further unlock the value of its nearly KRW 11 trillion (approximately USD 8 billion) acquisition of Intel's NAND business through the Dalian expansion. The report indicates that the Dalian second phase is considered the fastest-expanding location among SK Hynix's NAND production bases.

Industry background of the V8 production line: NAND prices reach historic highs

The timing of the restart is no coincidence. In Q1 2026, SK Hynix's average NAND price rose more than 70% quarter-on-quarter, setting a single-quarter historical record. The company's Q2 guidance further clarifies that NAND shipments will "turn from decline to rise" and rebound quarter-on-quarter. The simultaneous improvement in price and shipments provided a decision basis for restarting previously suspended capital expenditure plans.

Data from The Korea Times shows that SK Hynix's investment in its Dalian NAND manufacturing subsidiary in 2025 has increased to KRW 440.6 billion, up 52% year-on-year,— even before the second-phase expansion officially restarted, the company's investment in the NAND sector has begun accelerating.

On the technical route, SK Hynix has previously completed production verification for its 375-layer 3D NAND flash and plans to mass-produce it at the M15 factory in Cheongju, Korea by year-end. The Dalian V8 (238-layer) production line forms a technological gradient with this and serves different market positions respectively.

Rising competition: Samsung Xi'an factory accelerates synchronously

SK Hynix is not the only memory giant expanding NAND capacity in China. According to Sisa Journal, Samsung Electronics is also accelerating the upgrade of its Xi'an NAND factory. Samsung completed the conversion from 128-layer V6 to 236-layer V8 production lines on March 30, and is currently entering the mass production phase.

Investment data confirms this trend. Sisa Journal estimates that Samsung's investment in its Xi'an NAND factory for 2025 is about USD 304 million, up approximately 67.5% year-on-year. The simultaneous expansion of NAND capacity in China by Korea's two major memory giants means the global NAND supply side is shifting from a contraction cycle to an expansion track.

In terms of timing, Samsung's mass production of Xi'an V8 has already started, whereas SK Hynix's installation of V8 equipment at Dalian's second-phase plant is expected to begin in the second half of the year, resulting in several quarters’ difference in actual capacity release between the two.

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