US to ‘Indefinitely Extend’ China Chip Waivers For South Korea

 

Top South Korean chipmakers are set to receive an indefinite extension of their permissions to import American chipmaking technology to their fabs in China, Yonhap news agency reported, citing multiple sources, on Wednesday.

The extension would mark an end to business uncertainty for South Korea’s Samsung Electronics and SK Hynix, who have multiple chipmaking facilities in China, and plans to expand their operations in the country.

Yonhap said Washington officials are likely to announce the extension as early as this week. However, that could get delayed if the US government were to shut down due to Senate divisions over funding.

 

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Samsung and SK require licences to bring US chip equipment into China, due to the Biden Administration’s sweeping export control measures imposed last year.

But a year-long waiver from those export controls allowed both chipmakers to continue importing American chip equipment to China.

Under an indefinite waiver, the US Department of Commerce will add the two chipmakers to its “validated end user” (VEU) list, which denotes what entities can receive exports of various US technology. Once included on the list, the chipmakers would not require fresh permissions for separate export cases.

It would, thus, make way for Samsung and SK Hynix to keep receiving certain US chipmaking tools.

The US Commerce Department has discussed details with the South Korean chipmakers on which equipment they can use in China, Yonhap said.

Their discussions took into account Samsung and SK’s future plans, as equipment upgrades will also be required to maintain their business for the next few years, the report added.

Both companies have invested billions of dollars in their chip fabs in China. Samsung operates a NAND flash memory production facility in Xian city, while SK Hynix produces DRAM chips in Wuxi and NAND chips in Dalian.

Together, the two chipmakers control nearly 70% of global DRAM and 50% of NAND flash markets as of end-June, data from TrendForce showed.

 

• Reuters, with additional editing by Vishakha Saxena

 

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