Samsung Electronics and SK Futex are improving their factories in China to produce more advanced memory chips, according to four people known with these plans.

The goal is to cope with competition from a rapidly growing Chinese rival, as well as to meet the demand in the field of Artificial Intelligence ( Hel).

Determining the level of investments in their operations in China has become a complex issue for South Korean semi-compliance giants, especially since the U.S. began to impose controls on the export of equipment for chip production in 2022, as part of efforts to slow China’s technological progress.

The two companies now have to ask each year for licenses from the US if they want to install US-made equipment in China.

The US Trade Department’s Bureau of Industry and Security also stated that, for 2025, it has no intention of providing licenses to improve technology or expand capacities at factories these foreign producers own in China.

These regulatory difficulties have limited their ability to modernise factories, leading to market share loss in front of Chinese Yangtze Memory Technology Co ( YMTC).

Directors of South Korean companies have publicly warned that geopolitical tensions are damaging their operations in China.

In a statement to the Reuters agency, Samsung confirmed that the process of improvements has begun and is being carried out in close consultation with Washington.

The SK Futex announced it has installed equipment at its factory in Dalian, northeastern China, also in consultation with the American government.

None of the companies provided details on production plans, which are reported here for the first time.

However, Reuters could not determine to what extent the American authorities have granted export licenses for equipment Samsung and SK Hyx need for planned improvements.

According to sources, both companies are working to produce memory chips NAND) with more than 200 layers in their factories in China; the current products of these factories are not as advanced as the chips produced in South Korea.

NAND, a type of memory chip that stores data without electricity supplies, is widely used on intelligent phones, personal computers, and hard – condition disks ( SSD for Artificial Intelligence databases.

More layers for chip mean the highest density of conservation and lower costs. /Telegraphy/