SK Hynix's Solidigm Reportedly In Talks Over $45B Investment In US Chip Plant

• Solidigm is reportedly seeking approval to send chipmaking equipment to its Dalian, China, facility, saying increased sales from the plant would help finance the U.S. project.
• New York is among the locations being considered, with construction potentially beginning in 2027
• The discussions follow SK Hynix's decision last week to abandon plans for a potential Solidigm IPO, citing market conditions and share-price trends.

Solidigm, the U.S.-based subsidiary of South Korean memory-chip maker SK Hynix (SKHY), is reportedly in talks with the U.S. Commerce Department about investing $45 billion in a new American semiconductor manufacturing facility, 

According to Bloomberg, the company has indicated that its investment could eventually approach $100 billion. 

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New York is among the locations being considered, with construction potentially beginning in 2027, the publication reported, citing people familiar with the negotiations. However, no final investment decision has been announced.

Stocktwits reached out to Solidigm for comment on the report. The company had not responded at the time of publication.

Why Solidigm Wants Approval For Its China Plant

Solidigm wants Washington's permission to ship additional chipmaking equipment to its existing facility in Dalian, China, before committing to the proposed U.S. factory. 

The company has told U.S. officials that upgrading the Chinese plant would generate additional revenue to help finance the American project, per the report. The proposal comes amid U.S. restrictions on exports of advanced semiconductor manufacturing equipment to China.

Solidigm was reportedly seeking approval for additional equipment at Dalian. SK Hynix told Reuters that equipment installation was being conducted in consultation with U.S. authorities and that it was not pursuing a production capacity expansion.

Solidigm was established in 2021 after SK Hynix completed the first phase of its acquisition of Intel's (INTC) NAND flash-memory and solid-state drive businesses. The company specializes in solid-state drives (SSDs), particularly high-capacity storage products used in artificial intelligence (AI) data centers.

Solidigm declined to comment to Bloomberg on its discussions with the government but confirmed it was exploring possible locations worldwide for a new NAND manufacturing facility.

US Investment Talks Follow Abandoned IPO Plans

The talks follow SK Hynix's decision to abandon a potential U.S. IPO for Solidigm, which it had considered to help finance manufacturing expansion amid growing AI data-center storage demand.

In an October 23 statement, SK Hynix cited recent capital-market conditions and semiconductor share-price trends for discontinuing the review. The company said the decision did not change Solidigm's growth prospects or investment needs.

SK Hynix added that it would continue evaluating the timing, scale and financing of future investments, including alternatives to an IPO. For now, the proposed U.S. factory remains under consideration.

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