The United States has revoked key authorisations that previously allowed South Korean chipmakers Samsung and SK Hynix to use American semiconductor manufacturing equipment in China. The decision, published in the Federal Register, means the companies must now apply for licences to purchase such equipment for their Chinese facilities. Intel was also included in the list, although it sold its Dalian unit earlier this year.
These changes, which will take effect in 120 days, roll back exemptions that had been granted in 2022 when Washington introduced sweeping restrictions on semiconductor technology exports to China. While the US Commerce Department stated it would allow licences for the operation of existing facilities, it clarified that approvals would not extend to expanding capacity or upgrading technology.
In response, SK Hynix said it “will maintain close communication with both Korean and the U.S. governments and take necessary measures to minimise the impact on our business.” Samsung has not issued a statement. South Korea’s government has highlighted the importance of the stable operation of its chipmakers in China for the global semiconductor supply chain and confirmed it will continue talks with Washington to limit the impact.
China’s commerce ministry condemned the move, saying Beijing “opposes the U.S. move” and “will take necessary measures to resolutely safeguard the legitimate rights and interests of enterprises.”
The policy shift is expected to affect US equipment makers, including Lam Research, KLA Corp and Applied Materials. Shares of the three companies dropped following the announcement. Analysts suggest that Chinese equipment makers may benefit by filling the gaps, while Micron, a US competitor to Samsung and SK Hynix, could also gain an advantage.
Chris Miller, author of “Chip War,” noted, “This move will make it harder for Korean chipmakers with facilities in China to continue producing more advanced chips.” He added that if additional measures are not taken against Chinese chipmakers such as YMTC and CXMT, the decision could open market opportunities for them at the expense of South Korean firms.
Thousands of licence applications by US companies seeking to export goods and technology to China are also still pending, creating a major backlog. The removal of Samsung and SK Hynix’s Validated End User status, which previously allowed faster and easier shipments, will now add to the industry’s uncertainty.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream formerly known as CIO News LinkedIn Account | The Mainstream formerly known as CIO News Facebook | The Mainstream formerly known as CIO News Youtube | The Mainstream formerly known as CIO News Twitter |The Mainstream formerly known as CIO News Whatsapp Channel | The Mainstream formerly known as CIO News Instagram
About us:
The Mainstream formerly known as CIO News is a premier platform dedicated to delivering latest news, updates, and insights from the tech industry. With its strong foundation of intellectual property and thought leadership, the platform is well-positioned to stay ahead of the curve and lead conversations about how technology shapes our world. From its early days as CIO News to its rebranding as The Mainstream on November 28, 2024, it has been expanding its global reach, targeting key markets in the Middle East & Africa, ASEAN, the USA, and the UK. The Mainstream is a vision to put technology at the center of every conversation, inspiring professionals and organizations to embrace the future of tech.
