Samsung, SK Hynix Get US Licence For China Chip Gear Exports

US grants Samsung, SK Hynix indefinite licence to export high-end chip equipment to their factories in China amidst ‘all-out war’ over semiconductors

South Korean semiconductor giants Samsung Electronics and SK Hynix are to be allowed to send high-end US chip equipment to their massive plants in China indefinitely without further approvals from US authorities, the South Korean presidential office said on Monday.

The decision eases a fraught situation for the two firms created after the US introduced export controls on its chip technologies last October, aimed at hampering Chinese firms’ ability to develop cutting-edge chips that could compete with those from the US and its allies.

Samsung and SK Hynix were granted one-year exemptions from the rules that had been due to expire soon, and while a renewal was expected it was unclear how long the term of the new exemptions would be.

“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 senior presidential secretary Choi Sang-mok.

Seoul, South Korea. Image credit: Ethan Brooke/Pexels china
Seoul, South Korea. Image credit: Ethan Brooke/Pexels

Export controls

He said the US has already notified Samsung and SK Hynix of the move, meaning it is now in effect.

The presidential office said the US Department of Commerce was updating its “validated end user” list that denotes which entities can receive exports of which technology, allowing Samsung and SK Hynix to continue supplyinc certain US tools to their factories.

Inclusion in the list means it’s no longer necessary to obtain permission for distinct export situations.

Samsung said in a statement that “uncertainties related to the operation of our semiconductor manufacturing lines in China have been significantly removed”, while SK Hynix said it believed the decision would “contribute to the stabilisation of the global semiconductor supply chain”.

‘All-out war’

The two companies have spent more than $52 billion (£43bn) building up their operations in China, with Samsung building about 40 percent of its NAND flash chips at a plant in Xian, China, and SK Hynix making about 40 percent of its DRAM chips in Wuxi and 20 percent of its NAND flash chips in Dalian.

Samsung sold 36 percent of all memory chips and SK Hynix 25 percent as of June, according to TrendForce, with China receiving more than half of South Korean chip exports over the past decade.

South Korean president Yook Suk Yeol in June told a meeting of government officials and business executives that geopolitics had turned chip competition into an “all-out war”.