U.S. eases export controls on chip equipment for Samsung, SK factories in China

The United States has decided to allow exports of its semiconductor manufacturing equipment to Samsung Electronics and SK hynix factories in China without a separate approval process, the presidential office said Monday, a much-needed relief to the Korean chipmakers.

The U.S. government has designated Samsung Electronics and SK hynix’s chip factories in China as “verified end users (VEU),” which would reduce the licensing burden on them by allowing U.S. exporters to ship designated items to preapproved entities.

“The U.S. government’s decision means that the most significant trade issue of our semiconductor companies has been resolved,” Choi Sang-mok, senior presidential secretary for economic affairs, said during a briefing.

The U.S. government has already notified its decision to the two South Korean companies, and it takes effect immediately, according to Choi.

In October last year, the U.S. announced a set of rules that restrict exports of certain advanced semiconductor manufacturing equipment and items to companies in China in an apparent bid to slow Beijing’s technological advances in the key sector.

Samsung Electronics and SK hynix received a one-year waiver amid concerns that the move would disrupt their businesses in China, but the latest decision clears uncertainties over their chip production in China, which partly relies on U.S. equipment.

Samsung, the world’s largest memory chip maker, runs a chip manufacturing plant in the Chinese city of Xian, which accounts for some 40 percent of its global NAND flash production. In Suzhou, the chipmaker runs a semiconductor packaging factory.

Its smaller rival SK hynix currently operates multiple plants in China, including one in the eastern city of Wuxi, where it manufactures about half of its global DRAM chips.