Critics Raise National Security Concerns Over Hochul's Upstate Chip Plant Plan
Federal officials and China skeptics express apprehension that a proposed semiconductor facility could provide Beijing with access to advanced U.S. technology.
New York Gov. Kathy Hochul's efforts to attract a semiconductor plant to Oneida County, near Utica, are drawing scrutiny from federal officials and national security experts concerned about potential Chinese access to advanced U.S. technology. Sources close to the governor indicated that advanced discussions are underway with Solidigm, a subsidiary of South Korean chip giant SK Hynix, for the facility.
A federal official voiced apprehension, stating, "There are red flags here with some yellow stars that the feds are really going to worry about," and suggested that Hochul might be unwittingly facilitating China's technological advancement in the artificial intelligence arms race.
These concerns are amplified by the fact that Linda Sun, who previously served as Hochul’s deputy chief of staff from 2021 to 2023, is accused of having secretly worked for China.
Critics point to SK Hynix’s potential desire to leverage the New York plant to gain relaxed export controls from the Trump administration, enabling the transfer of advanced chipmaking equipment to its factory in Dalian, China. Reuters reported this month that SK Hynix may seek to condition the opening of the U.S. plant on the Commerce Department granting export licenses for equipment to be used in its Chinese operations.
Leland Miller, a member of the U.S.-China Economic and Security Review Commission and CEO of China Beige Book, stated that Beijing is pressuring companies like SK Hynix to expand their operations in China. "The Chinese absolutely want to catch up with the Koreans and Americans in terms of memory chip buildout," Miller said.
He further elaborated that the proposed New York facility could grant China a "back door" to observe the development of advanced memory capacity firsthand, potentially accelerating China's progress in the sector. "All these facilities are going to have more advanced IP than what they’ve been exposed to thus far. So they will be moving the needle forward for China, no matter what. The question is how much," Miller added.
Kristin Devoe, a spokeswoman for Governor Hochul, defended the project, emphasizing that such initiatives undergo a comprehensive federal national security review. She noted that Solidigm was founded and is headquartered in the United States and that the project aligns with a directive to build a domestic fab of its kind. "Reshoring this vital technology would mean THOUSANDS more American manufacturing jobs and chips made here instead of overseas," Devoe stated.
The Biden administration has already committed significant funding to SK Hynix, offering $458 million in grants and $500 million in loans under the CHIPS Act for a separate manufacturing plant being developed in Indiana.
Solidigm has confirmed that it is exploring options for a new NAND memory fab globally, including in the U.S., but has stated that no final decision has been made regarding any specific location or course of action.