South Korea’s Samsung Electronics and SK Hynix have been told they will be indefinitely exempt from US rules over chip tech exports to China.
The two firms, the world’s largest and second-largest memory chipmakers, have invested billions of dollars in their chip production facilities in China.
But they were caught in the crossfire of the US’s escalating trade war with China when Washington brought in licence requirements to firms bringing US chip equipment into China.
Thanks to the waiver, Samsung and SK Hynix will be allowed to supply US chip equipment to their China factories indefinitely without separate US approvals, South Korea’s presidential office and the companies confirmed on Monday.
“Uncertainties about South Korean semiconductor firms’ operations and investments in China have been greatly eased; they will be able to calmly seek long-term global management strategies,” said Choi Sang-mok, senior presidential secretary for economic affairs.
The US has already notified Samsung and SK Hynix of the decision, indicating that it is in effect, Choi said.
The US Department of Commerce is updating its “validated end user” list, denoting which entities can receive exports of which technology, to allow Samsung and SK Hynix to keep supplying certain US chipmaking tools to their China factories, the presidential office said.
Once included in the list, there is no need to obtain permission for separate export cases.
Chip Firms Welcome Ruling
“Through close coordination with relevant governments, uncertainties related to the operation of our semiconductor manufacturing lines in China have been significantly removed,” Samsung said in a statement.
SK Hynix said: “We welcome the US government’s decision to extend a waiver with regard to the export control regulations. We believe the decision will contribute to the stabilisation of the global semiconductor supply chain.”
Samsung Electronics makes about 40% of its NAND flash chips at its plant in Xian, China, while SK Hynix makes about 40% of its DRAM chips in Wuxi and 20% of its NAND flash chips in Dalian.
The companies together controlled nearly 70% of the global DRAM market and 50% of the NAND flash market as of end-June, data from TrendForce showed.
- Reuters with additional editing by Sean O’Meara