A plan has surfaced for SK hynix to increase NAND flash production at its Dalian, China facility by 50% in 2027. According to SEDaily, monthly wafer output would rise from the current roughly 100,000 sheets to about 150,000, with floating gate (FG)-type QLC NAND exceeding 200 layers being directed toward enterprise SSDs (eSSDs). The company has not officially disclosed this figure, and as of July it had stated that "a specific schedule for restarting the second Dalian fab has not yet been finalized." However, connecting equipment orders and pilot lines reported over the past four months is consistent with a plan to add 50,000 wafers per month via a new line on top of the existing 100,000 wafers per month.
If the Dalian expansion proceeds as planned, SK hynix could increase supply without waiting for its new NAND fab in Korea. However, installing equipment for 50,000 wafers per month is not the same as increasing product shipments by the same proportion. Whether the company reaches 150,000 wafers per month in 2027 will depend on the yield of the 200-plus layer FG products, and if additional imports of U.S.-made manufacturing equipment are needed the following year, obtaining the annual license for 2027 will also become a condition.
The Additional 50,000 Wafers Fills the 2027 Gap
The increase reported by SEDaily on August 11 is 50,000 wafers per month. This matches the scale of the second Dalian fab expansion reported by Seoul Economic Daily in April. In May, The Bell reported that a pilot line would be set up to verify mid-200-layer-class FG NAND in the third quarter of 2026, with full-scale mass production targeted for the second half of 2027. Additionally, NewsTomato reported in July that equipment would be brought in sequentially from the second half of 2026 through the first half of 2027.
The second Dalian fab held a groundbreaking ceremony in 2022, but investment was temporarily halted amid the subsequent NAND downturn. Supporting the restart is demand for eSSDs for AI data centers. SK hynix itself explained in its earnings announcements for the first and second quarters of 2026 that customer demand exceeds supply capacity. In the second quarter, sales of high-value-added products including NAND grew, and prices for both DRAM and NAND rose significantly from the previous quarter.
Time is also on Dalian's side. On August 7, SK hynix announced it would invest 19.1 trillion won in its new NAND fab M17 in Cheongju, Korea, but the first clean room will not open until December 2028. Moreover, equipment will be installed in stages according to demand. The second Dalian fab, which uses an existing building, could potentially begin providing additional supply more than a year earlier.
Separate from the 321-Layer Line: Growing Mid-200-Layer FG in Dalian
The core technology SK hynix is advancing in Korea is 321-layer charge trap flash (CTF). The company revealed in the second quarter of 2026 that 321-layer products would become the largest share of NAND production and account for about 50% of domestic production capacity in Korea by year-end. CTF is a structure that holds charge in an insulator, making it easier to suppress interference between cells.
In contrast, the product reportedly being prepared in Dalian uses an FG structure. FG stores charge in a conductor, a technology lineage inherited from Intel. The first Dalian fab has been producing 144-layer and 192-layer FG NAND. According to The Bell, the second fab will first use a pilot line called "one-pass" to verify process stability and mass-production readiness for a new product with an increased layer count in the mid-200-layer range.
The reason the same company is advancing two structures in parallel is that they target different products. The new Dalian product combines the FG structure with QLC, which records 4 bits per cell. QLC can increase storage density, making it well-suited for large-capacity eSSDs. SK hynix explained in its Q1 earnings that it would deploy high-capacity QLC eSSDs, an area where Solidigm has strength, to AI data centers. Rather than replacing the 321-layer products made in Korea, the mid-200-layer FG products from Dalian are meant to expand Solidigm's enterprise product lineup.
The 50% Figure Refers to Wafer Count
The increase from 100,000 to 150,000 wafers per month represents a 50% rise. However, this figure represents wafer processing volume. The final shippable storage capacity depends on the number of good dies obtainable per wafer, the layer count, the bits per cell, and the fab's utilization rate. Yield during the ramp-up of a new process also plays a role.
SK hynix's filings with the U.S. Securities and Exchange Commission (SEC) also explain that advances in layer-stacking technology increase bit production per wafer. If the combination of mid-200-layer FG and QLC can be stably mass-produced, then in addition to the increase in wafer count, the storage capacity obtainable per wafer will also change. Conversely, if yields do not improve on the pilot line, a gap will emerge between the equipment-based capacity of 150,000 wafers per month and the actual product volume reaching the market.
Caution is also needed when converting this to market share. In the first quarter of 2026, SK hynix held an 18.5% global revenue share in NAND, ranking second. This is a revenue-based ratio, and increasing Dalian's wafer count by 50,000 does not mean market share will rise by a proportional amount, since product unit prices, product mix, and supply volumes from other companies will also change simultaneously.
An Annual License Would Be Required for Additional Imports in 2027
In 2025, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) removed SK hynix's Wuxi site and the Dalian site (then under the Intel name) from the "Validated End-User" (VEU) list. Under VEU status, covered equipment could be imported under a general authorization, but after the authorization ended, an export license became necessary. According to a prospectus SK hynix submitted to the SEC, the company moved to a system of submitting annual equipment demand plans and obtained the annual license for 2026 in December 2025.
Under this system, if additional U.S.-made equipment is to be imported in 2027, the next annual license will be required. SK hynix has told investors that failure to obtain necessary licenses in a timely manner could seriously affect its manufacturing operations in China. Acquisition of the 2027 license has not yet been announced. Meanwhile, it also remains unclear whether the second Dalian fab can ramp up to 150,000 wafers per month using only equipment imported within 2026, or whether additional imports the following year will be necessary.
Progress on the expansion can initially be gauged by the one-pass line's operation in the third quarter of 2026 and the start of FG QLC mass production reportedly slated for the second half of 2027. If it becomes clear that equipment imports in the following year are needed for the ramp-up, the 2027 export license will also become a point to watch. Once the pilot line's yield and the equipment introduction process become clear, the timing of when the 150,000-wafer-per-month figure shifts from a planned value to actual production should also become visible.