South Korean chipmakers allowed to ship US chipmaking tech to their Chinese factories

South Korea’s presidential office and several tech companies like Samsung Electronics and SK Hynix, have announced that they are now authorized to continue providing US chip equipment to their Chinese factories without the need for separate approvals from the United States.

It had been anticipated that the US would extend a previously granted waiver to these South Korean chip manufacturers, relieving them from the obligation to obtain licenses for importing US chip equipment into China.

“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.

Samsung and SK Hynix, the world’s largest and second-largest memory chipmakers, had invested billions of dollars in their chip production facilities in China and welcomed the move.

“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 per cent of its NAND flash chips at its plant in Xian, China, while SK Hynix makes about 40 per cent of its DRAM chips in Wuxi and 20 per cent of its NAND flash chips in Dalian.

The companies together controlled nearly 70 per cent of the global DRAM market and 50 per cent of the NAND flash market as of end-June, data from TrendForce showed.

(With inputs from agencies)

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