TrendForce says SK Hynix to raise legacy chip output capacity in China

SEOUL (Reuters) -South Korea's SK Hynix Inc plans to expand its legacy chip production capacity at its chip manufacturing facilities in Wuxi, China, market research firm TrendForce said.

The world's second-biggest memory chip maker's long-term strategy involves shifting its capacity expansion back to South Korea, while its Wuxi chip production site caters to domestic demand in China and the legacy DRAM memory chip market, the TrendForce report said.

SK Hynix did not immediately respond to a Reuters request for comment on Thursday. TrendForce said its report was based on its "latest research", without citing sources.

The report said SK Hynix had planned for its Wuxi factory to lower the output of legacy chips, but SK Hynix had instead decided to increase production capacity of them due to the U.S. curbs on exports of chip-making equipment to China, requiring licenses for U.S. companies to export advanced chips and chip-making equipment in a bid to slow China's technological advance.

In March, SK Hynix's chief executive said it will ask the United States for a year's further exemption from the curbs.

Last year, SK Hynix said it had received authorisation from the U.S. Commerce Department for a year to supply equipment needed for chip production in facilities in China, without seeking additional licensing requirements.

SK Hynix has another chip plant in China in Dalian.

(Reporting by Heekyong Yang and Joyce Lee; Editing by Alexander Smith and Susan Fenton)