The United States is set to allow chipmakers in South Korea and Taiwan to continue to operate and expand their current chip facilities in China without worry of pushback from the Biden Administration, according to a report by the Wall Street Journal on Monday.
Top US official Alan Estevez told a gathering of the Semiconductor Industry Association — a trade and lobby group that has previously expressed concerns on being cut off from the Chinese market — that the Biden government planned to extend earlier chip export control waivers it granted to top South Korean and Taiwanese chipmakers, according to the WSJ report.
The move will allow the chipmakers, which include Samsung, SK Hynix and TSMC, to continue to import US chipmaking tools to China for use in their existing fabs in the country.
Estevez’s comments will come as a relief for chipmakers in South Korea and Taiwan which depend on US and its allies for chip technology and equipment but have invested billions in manufacturing facilities in China.
TSMC, the world’s largest contract chipmaker, has facilities in China’s eastern city of Nanjing and has previously sought to keep up their expansion.
The chipmakers are caught between an ongoing tech war between the US and China, sparked by export restrictions imposed by the Biden government last year to throttle China’s advances in artificial intelligence (AI), semiconductors and military technology.
The restrictions cut off chipmakers from new US chip equipment for use in fabs in China. However, the US granted a one-year waiver to top South Korean and Taiwanese chipmakers, which was set to expire in October.
Estevez, the US Commerce Department‘s under secretary for industry and security, said the US will be extending those licences for the “foreseeable future”, according to the WSJ report, quoting attendees.
The development highlights the challenges before the US as it pushes to cut off China from advanced technology given its wide-ranging role in tech supply chains.
Top chipmakers, including American giant Nvidia, have voiced concerns against the Biden government’s chip curbs against China.
South Korea, which sends 40% of its chip exports to China, has also remained wary of taking sides in the chip war between the world’s two biggest economies.
Last week, Seoul’s industry minister had said the country had assurances from the US that the export control restrictions would last “for a considerable period of time.”
“We’ve told the US side that our companies should be able to maintain their current operations in China as long as their business activities do not disrupt global semiconductor supply chains,” Industry Minister Lee Chang-yang had said.
- Vishakha Saxena