[News] SK hynix’s China eSSD Business Hits Turning Point as Intel NAND Deal Restrictions Near Expiry by End-2026
As the memory boom drives prices higher across DRAM, NAND and end-products, SK hynix is approaching a key growth inflection point: China’s five-year restrictions on its enterprise SSD (eSSD) business are set to reach a turning point at the end of 2026, Yonhap News reports.
Restrictions on eSSD Price Hikes in China
DealSite, citing SK hynix’s semiannual report, reports that China’s State Administration for Market Regulation (SAMR) approved the memory giant’s acquisition of Intel’s NAND business in 2021 subject to several conditions. The key restrictions centered on eSSD pricing, barring SK hynix from raising prices for PCIe and SATA eSSDs in China above the average price in the 24 months preceding the approval, provided that transaction terms remained unchanged, the report explains.
The restrictions stemmed from SAMR’s concerns that the combination of the two companies could potentially weaken competition in China’s enterprise SSD market, particularly for products using PCIe and SATA interfaces, Yonhap News reports.
SK hynix was also required to continuously expand production of the relevant products for five years and support the entry of a third competitor into China’s eSSD market, according to the report.
SK hynix’s five-year compliance period is set to expire this December. However, the restrictions will not automatically lapse, and the company is expected to seek their removal once it becomes eligible, according to Yonhap News. If the restrictions are lifted, SK hynix would gain greater flexibility to adjust eSSD pricing in China to reflect AI data center demand and rising NAND prices, while aligning production volumes and supplier allocation with profitability.
China’s Strategic Role in SK hynix’s NAND and eSSD Business
China is a key NAND production hub for SK hynix, with its capacity there expected to account for 35%–40% of the company’s total NAND capacity in 2026, according to TrendForce. As NAND chips form the backbone of eSSDs, this local capacity powers its global AI server supply—making the potential lifting of these local pricing caps a crucial catalyst for the company’s profitability.
Against this backdrop, SK hynix has also faced growing pressure in the eSSD market. According to TrendForce, SK hynix Group, including Solidigm, ranked second in 2Q26 with a 21.1% global eSSD market share, down from 23.1% in 1Q26. Samsung retained the top spot with a 35.1% share, while Micron ranked third at 17.1%, up from 15.4% in 1Q26.
China’s eSSD Competition Could Shape SAMR’s Decision
When deciding whether to lift the restrictions, Chinese authorities will have to balance the need to ensure stable, cost-efficient supplies for AI data center customers with efforts to foster domestic players such as YMTC, Yonhap News reports.
YMTC has rapidly strengthened its position in the NAND market, recently moving closer to the global leaders. Although enterprise SSDs still account for a relatively small portion of its business, expanding its eSSD operations could become an important growth driver, Yonhap News reports. As YMTC and other Chinese players strengthen their presence, SAMR could determine that competition in the market has become robust enough to justify easing the current restrictions, the report explains.
At the same time, maintaining the restrictions could create a different dilemma: the price caps imposed on SK hynix may not only constrain the company, but also put pressure on the price competitiveness and profitability of Chinese eSSD makers, Yonhap News points out. This could further complicate SAMR’s decision as it weighs market competition against the need to support domestic suppliers.
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(Photo credit: SK hynix)
