SK Hynix is seeking approval from Washington to export US chipmaking equipment to China to increase production there as a condition for building a factory in the US, two people familiar with the matter said on Wednesday.

The Trump administration is pressing SK Hynix, Samsung and other foreign chipmakers to build plants in the US in a drive to rebuild US manufacturing capacity and create jobs. The semiconductor giant’s request highlights the complex regulatory landscape governing global chip supply chains.

Strategic conditions for expansion

The move involves seeking new equipment for unused space in Hynix’s Dalian facility. This plant produces memory for solid-state drives that Solidigm sells to data centers. Expanded production from China would help Solidigm fund a new US NAND facility, creating a financial link between the Chinese operations and future US investments.

Regulatory context

The situation underscores the tension between US efforts to onshore manufacturing and the operational realities of global semiconductor firms. While the administration pushes for domestic production, companies like SK Hynix are leveraging their existing international infrastructure to negotiate terms that support both local growth and global supply chain efficiency.

SK hynix Inc. (NASDAQ: SKHY) shares fell 11.42% in Seoul on Thursday, closing at KRW 1,257,000 ($929.92). The decline deepened a global semiconductor selloff driven by hotter U.S. inflation data, renewed Federal Reserve rate-hike expectations, and growing concerns over the financing of artificial intelligence infrastructure.

The drop follows a Tuesday session where the stock fell 10.09% to KRW 1,443,000, dipping below its 200-day moving average for the first time since May 2, 2025. That earlier decline was triggered by reports that Chinese rival Yangtze Memory Technologies Co. (YMTC) filed for an IPO on Shanghai’s STAR Market, raising fears of increased competition in the NAND sector.

Macro headwinds and AI financing doubts

U.S. consumer prices rose 3.7% year over year in September, up from 3.4% in August, according to the Bureau of Labor Statistics. This data has strengthened bets on further Federal Reserve tightening, with one more rate hike expected this year following the September 16 increase to a range of 3.75% to 4%.

Simultaneously, industry leaders have raised alarms about the capital intensity of the AI buildout. Broadcom Inc. (NASDAQ: AVGO) CEO Hock Tan stated that access to capital could become a larger obstacle for AI than chip or power shortages. Intel Corp. (NASDAQ: INTC) CEO Lip-Bu Tan also flagged rising financing costs and uncertainty regarding investment returns. Goldman Sachs Group, Inc. (NYSE: GS) CEO David Solomon warned that not every data center project will secure favorable financing terms, noting the 10-year Treasury yield has risen about 75 bps since early July.

Competitive landscape shifts

Counterpoint Research noted that stripping out SK hynix’s Solidigm unit places YMTC at No. 2 globally by NAND shipment volume. Jeongku Choi, senior analyst at Counterpoint, stated that YMTC’s revenue in 2026 is bound to grow 6x faster than the industry and its peers. The filing follows DRAM maker ChangXin Memory Technologies (CXMT), which ended its first trading day in July above CNY 3 trillion, or about $443 billion.

Neil Shah, research vice president at Counterpoint, explained that YMTC’s Xtacking architecture allows it to keep adding layers using mature lithography tools, bypassing some US export controls. However, MS Hwang, research director at Counterpoint, noted the critical question remains whether YMTC can convert technical progress into design wins outside China. A pending US bill, the MATCH Act, targets the tools YMTC’s roadmap depends on.

Broader sector pressure

The weakness extended across global technology stocks. Samsung Electronics Co. Ltd. (OTC: SSNLF) fell 8.84% in Seoul to KRW 211,500 ($156.47). South Korea’s KOSPI index dropped 7.81% to 5,539.34. In Japan, the Nikkei fell 4.12% to 64,951.15, with SoftBank Group Corp falling 9.34%.

On Wall Street, the tech-heavy Nasdaq Composite fell 1.88% to 26,692.87, while the S&P 500 slid 1.11% to 7,718.94. The iShares Semiconductor ETF (NASDAQ: SOXX), which has gained more than 70% this year, has lost money in each of the past seven sessions. Micron Technology Inc. (NASDAQ: MU) fell 3.7% in U.S. premarket trading on Tuesday, while Sandisk Corp. (NASDAQ: SNDK) declined 4.6%.

Analyst views on sector linkage

CNBC’s Jim Cramer argued that U.S. chipmakers are "joined at the hip" with SK hynix, noting that the SMH ETF causes the entire sector to trade together. He suggested SK hynix faces greater exposure to Chinese competition than Micron due to its larger memory business. Drew Pettit, Chief Investment Strategist at Roundhill Investments, stated that the memory sector is in a transition phase after rapid growth, making stocks vulnerable to negative headlines and elevated interest rates.

Gil Luria, Head of Technology Research at D.A. Davidson, noted that while Chinese suppliers like CXMT have improved DRAM market share, they still participate mainly in the lower end of the market and do not compete in high-bandwidth memory, where SK hynix and Samsung remain major suppliers. Luria pointed out that Chinese companies cannot sell chips to major U.S. customers such as Microsoft Corp., Amazon.com Inc., Alphabet Inc.’s Google, Apple Inc., and NVIDIA Corp.

Despite the selloff, tech analyst Dan Ives described the pullback as a buying opportunity, stating that the AI boom is still in its early stages. Benzinga Edge rankings indicate SK Hynix’s ADR has a Momentum score in the 98th percentile and a value score in the 58th percentile.