SK Hynix Restarts Dalian Phase 2 as NAND Prices Surge Over 70% in a Single Quarter
N.R. Finch
SK Hynix plans to restart its shelved Dalian Phase 2 expansion in H2 2026, adding a 238-layer NAND line — driven by a record 70%+ quarter-on-quarter surge in NAND pricing. With Samsung ramping Xi'an in parallel, global NAND supply is shifting from contraction to expansion, and whether today's price peak can hold is the key question ahead.
What is Dalian Phase 2, and how big is it?
SK Hynix will add a V8 (238-layer) NAND line at Dalian Phase 2, targeting monthly capacity of 30,000–50,000 wafers.
Equipment installation begins in H2 2026; facility completion is targeted for H1 2027. Chinese partners have started transferring idle NAND equipment to Dalian, and overseas suppliers have reportedly received preliminary procurement orders.
Phase 1 is upgrading in parallel — converting lines to 192-layer NAND and replacing aging equipment. This means → the entire Dalian site is undergoing a full technology refresh, not just a Phase 2 addition.
Why restart now — have the original obstacles cleared?
Phase 2 was shelved for two reasons: uncertainty around U.S. export controls on semiconductor equipment to China, and prolonged weakness in the NAND market.
On export controls: the U.S. has replaced the old Validated End-User (VEU) system with an annual approval process for equipment shipments, reducing uncertainty and opening a workable path for SK Hynix. In plain terms = it went from "we don't know if equipment can get in" to "annual review, predictable process."
On the market: SK Hynix's average NAND selling price rose over 70% quarter-on-quarter in Q1 2026 — a single-quarter record. Q2 guidance confirms shipment volumes will rebound sequentially. This means → both price and demand have turned, making the economics of expansion viable again.
How much has SK Hynix already invested in Dalian?
Per the Korea Times, SK Hynix's 2025 investment in its Dalian NAND manufacturing subsidiary reached ₩440.6 billion, up 52% year-on-year.
This reflects a trend already in motion before the formal Phase 2 restart — the ramp-up is a continuation of accelerating capital commitment, not a sudden pivot.
Samsung is expanding in China too — what does the broader picture look like?
Samsung Electronics completed its Xi'an fab conversion from 128-layer V6 to 236-layer V8 on March 30 and is now entering mass production.
Samsung's 2025 investment in its Xi'an NAND fab is estimated at roughly $304 million, up about 67.5% year-on-year.
Timing gap: Samsung's Xi'an V8 ramp is already underway, while SK Hynix's Dalian Phase 2 equipment installation is not expected to begin until H2 — actual capacity release is several quarters apart.
The technology ladder: what do 238 layers and 375 layers each target?
SK Hynix has completed production validation of 375-layer 3D NAND and plans mass production at its Cheongju M15 fab in Korea by year-end.
The Dalian V8 (238-layer) line and the Cheongju 375-layer line form a technology ladder, serving different market tiers. In plain terms = the cutting edge stays in Korea; the mature node goes to Dalian — a classic tiered-deployment strategy.
Can the price surge hold?
Both Korean memory giants are expanding NAND capacity in China simultaneously, signaling that global NAND supply is shifting from a contraction cycle into an expansion track.
This means → the current 70%+ single-quarter price surge was built on tight supply. As new capacity comes online, whether prices can stay at these levels becomes the core test for H2 2026 and into 2027.
In plain terms = the price surge is the reason for restarting expansion, but expansion itself will pressure prices back down. When that cycle flips will determine the next move for the memory sector.
Content is for reference only, not financial advice.