Big Board Alerts

October 9, 2023
US approves chip tool exports to China for Korean giants

The United States has granted Samsung Electronics and SK Hynix indefinite waivers allowing them to export American chipmaking equipment to their factories in China without requiring separate approvals, South Korea announced Monday.

According to an Oct. 9 Reuters report, the waivers remove uncertainties about the South Korean chipmakers’ China operations. Samsung and SK Hynix welcomed the U.S. decision, saying it will help stabilize the global semiconductor supply chain.

The U.S. Department of Commerce is adding Samsung and SK Hynix to its “validated end user” list, indicating the companies can keep supplying specific U.S. tools to their China plants without additional export licenses. The “validated end user” designation streamlines the export process for pre-approved companies by not requiring a license for each product shipment.

Samsung makes around 40% of its NAND flash memory chips in Xian, China

Samsung makes around 40% of its NAND flash memory chips in Xian, China, while SK Hynix produces about 40% of its DRAM chips in Wuxi and 20% of its NAND chips in Dalian. NAND and DRAM chips are vital components used in electronics like smartphones and computers. Together, the firms control nearly 70% of the DRAM market and 50% of the NAND flash market globally. Choi Sang-mok, senior presidential secretary for economic affairs commented:

“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.”

SK Hynix similarly said the waivers will contribute to stabilizing the global chip supply chain. Both companies have invested billions in their China factories. Semiconductor manufacturing requires enormous capital expenditure, so steady operations are critical.

According to South Korea’s presidential office, the U.S. has already notified Samsung and SK Hynix that the indefinite waivers are in effect. The move indicates Washington’s effort to balance security concerns about tech transfers to China with supporting the critical semiconductor sector. Chip shortages in recent years have demonstrated the importance of supply chain resilience.

Featured Image Credit: Photo by Sergei Starostin; Pexels; Thank you!

The post US approves chip tool exports to China for Korean giants appeared first on ReadWrite.


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