Item enhancement is an additional option to increase your hangar strength which is available to all players.
The option becomes available when your item/robot reaches level 12:
After you choose to enhance an item to MK2, it will be downgraded to Mk2 level 1 but it won't lose any of its stats. Each MK2 level increases an item's power by a fixed amount (2%) up to a total of 22%, so that the parameters grow smoothly.
The price for the enhancement is 500 Au (gold):
The upgrade cost in Ag (silver) as well as the upgrade timers settle on a flat value starting from MK2 level 5.