US President Donald Trump’s administration would make it harder for Samsung Electronics Co and SK Hynix Inc to ship critical equipment to their chipmaking operations in China, dealing a potential blow to the companies’ production in the world’s largest semiconductor market.
The US Department of Commerce in a notice published on Friday said that it was revoking waivers for Samsung and SK Hynix to use US technologies in their Chinese operations. The companies had been operating in China under regulations that allow them to import chipmaking equipment without applying for a new license each time.
The move would revise what is known as the validated end user (VEU) rules, handicapping the ability to make chips in the country and jeopardizing Beijing’s access to certain technologies.
Photo: Bloomberg
The waivers date back to 2023, when then-US president Joe Biden’s administration moved to allow the chipmakers to acquire the equipment they need to sustain and expand their operations in China. Washington had effectively granted an indefinite waiver on broader restrictions banning the shipment of advanced chipmaking gear to the country.
The department said that it has no intention of granting licenses that would allow companies to “expand capacity or upgrade technology” at manufacturing facilities in China, and indicated that the move was intended to end a break that it saw as aiding foreign producers without any similar benefit for US manufacturers.
“The Trump administration is committed to closing export control loopholes — particularly those that put US companies at a competitive disadvantage,” said US Under Secretary of Commerce for Industry and Security Jeffrey Kessler, who oversees export control programs. “Today’s decision is an important step toward fulfilling this commitment.”
The companies have 120 days until the waiver expires, an announcement in the US Federal Register showed. Companies could seek licenses to continue operations. The notice also listed a unit of Intel Corp that has since been acquired by SK Hynix.
Samsung and SK Hynix rely on China for a sizeable portion of their memory chip production capacity. They make components that are incorporated into smartphones and consumer electronics assembled in the country.
The US decision emerged days after Trump met South Korean President Lee Jae-myung at the White House. In their meeting on Monday, they discussed a recently sealed agreement that set tariffs on South Korean goods at 15 percent, sparing the country from the 25 percent that Trump had threatened.
South Korea’s Ministry of Trade, Industry and Energy on Friday said that it would work to minimize disruption for the country’s businesses.
“The government has been closely communicating with the US Department of Commerce on possible adjustments to the VEU system, stressing the importance of smooth operations of our chipmakers’ Chinese facilities for global semiconductor supply chain stability,” the ministry said.
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