09 Oct 2023 -
 General

South Korean semiconductor giants get waiver on U.S. chip gear supplies to China

samsung-phones

In a decisive move that promises stability and growth in the global semiconductor industry, Samsung Electronics and SK Hynix have received the green light from the United States to continuously supply U.S. chip equipment to their manufacturing facilities in China, reports Nikkei. This comes without the need for any further separate U.S. permissions. The important decision was announced by South Korea’s presidential office, reports Nikkei.

Previously, it was anticipated that the U.S. would prolong a waiver granted to these South Korean semiconductor behemoths. This waiver would negate the necessity for licences to introduce U.S. chip apparatus into China. As Choi Sang-mok, senior presidential secretary for economic affairs, eloquently put it, “The anxieties shadowing the operations and investments of South Korean semiconductor companies in China have now dramatically diminished.” This means the companies can now confidently craft long-term global management strategies without any looming uncertainty.

Highlighting the gravity of this decision, Choi revealed that both Samsung and SK Hynix had been officially informed by the U.S., indicating that the new provision is now in active effect. To further cement this, the U.S. Department of Commerce is revising its “validated end user” roster. This crucial list dictates which organisations can be beneficiaries of which technological exports. With Samsung and SK Hynix on this list, they will be equipped to persistently supply specific U.S. chipmaking tools to their establishments in China without a hitch.

For those unaware, Samsung and SK Hynix are no ordinary players in the chipmaking game. They stand as the largest and the second-largest memory chipmakers on the globe. The magnitude of their investment in their Chinese production hubs runs into the billions of dollars. Naturally, they greeted this decision with enthusiasm. “Through meticulous coordination with pertinent governments, we have successfully eliminated uncertainties surrounding our semiconductor production in China,” Samsung declared.

SK Hynix, echoing this sentiment, stated, “The extension of this waiver by the U.S. government vis-à-vis the export control regulations is indeed a welcome step. We are optimistic that it will play a pivotal role in stabilising the global semiconductor supply chain.”

A peek into their operations reveals that about 40% of Samsung Electronics’ NAND flash chips are produced at their Xi’an plant in China. On the other hand, SK Hynix crafts roughly 40% of its DRAM chips in Wuxi and 20% of its NAND flash chips in Dalian. The combined market dominance of these firms is huge. As of the end of June, data from TrendForce highlighted that together, they held almost 70% of the global DRAM market and 50% of the NAND flash market.

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