SK Hynix has told US officials it will only build a new memory fab on American soil if Washington loosens its restrictions on exporting American chipmaking equipment to the company's existing plants in China, according to a Reuters exclusive citing sources familiar with the talks.

That's a striking opening bid. The world's second-largest memory maker — and the dominant supplier of HBM DRAM that feeds Nvidia's AI accelerators — is effectively telling two governments that its US expansion and its Chinese operations can't be separated.

The logic is operational, not political. SK Hynix runs advanced NAND and DRAM capacity in Wuxi and Dalian, plants it inherited and expanded over more than a decade of investment in China. Those fabs depend on US-origin process tools — lithography, deposition, etch — for maintenance, upgrades and any capacity work. If export licenses dry up, the Chinese plants degrade. If the Chinese plants degrade, the company's balance sheet that would fund a multibillion-dollar US fab weakens too.

What is SK Hynix actually asking for?

According to the Reuters report, the condition is straightforward: more US chip equipment must be allowed to flow to SK Hynix's China facilities. The company has not publicly confirmed the talks, and the report rests on sources speaking on condition of anonymity, so treat the specifics — which tools, which plants, which licensing channel — as unresolved.

What's clear is the leverage calculus:

• Washington wants leading-edge memory built domestically, and SK Hynix is one of only three companies on Earth that can do it.
• SK Hynix wants certainty that its installed base in China keeps running.
• Each side holds something the other needs.

Why does China matter to a US fab decision?

Because memory is a cash-flow business. DRAM and NAND pricing runs in brutal cycles, and the margins earned across a global footprint are what pay for the next fab, wherever it sits. A US facility carries higher construction and operating costs than SK Hynix's Korean or Chinese sites; committing to it makes commercial sense only if the rest of the network stays healthy.

There's also the precedent question. Samsung and SK Hynix both received vendor general authorization status in 2023, letting them keep supplying US tools to their Chinese plants without case-by-case licenses. Any tightening of that regime — something hawks in Washington have periodically pushed for — would hit SK Hynix hardest among the three memory makers, given the scale of its Chinese DRAM base.

Linking the two asks turns a Washington policy debate into a single negotiation. Build in the US, keep China running: one package, one answer.

What does this mean for US chip policy?

For the Commerce Department and the White House, it's a genuine dilemma. Squeezing China's access to advanced tools has been a bipartisan project since the sweeping October 2022 export controls. But the same squeeze applies to Korean-owned fabs in China, and those fabs belong to a company Washington is courting as a cornerstone of the US memory supply chain.

Concessions here wouldn't be cost-free politically. Granting SK Hynix broader equipment export leeway creates an obvious lobbying precedent for every other multinational with China exposure — and there are many.

Refusing has costs too. If SK Hynix slow-walks or scales down a US fab, the stated goal of onshoring leading-edge memory takes a visible hit, and rivals in Korea, Japan and the US itself will read the signal.

What happens next?

Neither SK Hynix nor US agencies have commented publicly on the conditions, and no dollar figure, site or timeline for the proposed US factory has been confirmed. The negotiation, as Reuters frames it, is over whether America's China restrictions and its onshoring push can be made compatible — or whether SK Hynix will be forced to choose which government it disappoints.