US gives waiver to Samsung, SK Hynix for chip equipment to China - report
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U.S. will allow Samsung Electronics (OTCPK:SSNLF) and SK Hynix to buy the equipment they require to maintain and expand their large chipmaking operations in China, South Korea's presidential office said in a statement.
The Biden administration has effectively granted the two companies an indefinite waiver on broader restrictions banning the shipment of advanced chipmaking gear to China, the statement noted.
"The U.S. government's decision means that the most significant trade issue of our semiconductor companies has been resolved," said Choi Sang-mok, senior presidential secretary for economic affairs, in a briefing, according to news agency Yonhap.
The U.S. designated Samsung and SK hHnix's chip factories in China as "verified end users" which would reduce the licensing requirements on the companies, the report noted.
It was not known if there are other companies who could benefit from this. Micron Technology (MU) is a competitor of the two companies.
In October 2022, the U.S. unveiled new curbs on exports of certain advanced semiconductor manufacturing equipment to companies in China. Samsung and SK Hynix had secured a one-year waiver over concerns that the move would disrupt their businesses in China. However, the new decision clears uncertainties over their chip production in China, which partly depends on U.S. products.
"We welcome the U.S. governmentâs decision to extend a waiver with regard to the export control regulations," said Hynix according to a report from Bloomberg News.
In 2022, Hynix had warned that the U.S. restrictions could force the closure or sale of a major plant in China in a worst-case scenario, Bloomberg reported previously. The South Korean company operates a DRAM factory in Wuxi in central China, which makes a major proportion of its global memory chips, and also operates NAND facilities in Dalian, China.
"Through close coordination with relevant governments, uncertainties related to the operation of our semiconductor manufacturing lines in China have been significantly removed,â Samsung said in a statement as per the Bloomberg report.
Last week, it was reported that the U.S. is giving China an additional warning that it will update its rules on export controls for semiconductors and semiconductor equipment, perhaps as soon as next month.
In September, the U.S. Commerce Department issued final rules aimed at restricting expansion in China by semiconductor companies which would receive federal funds. The Department, however, removed a curb in the initially proposed terms. Previously, the agency defined significant transactions based on a monetary level of $100,000. The Department would now define "significant" as it weighs awards to individual companies rather than via rule-making.
Earlier on Monday, China unveiled a plan aimed to step up efforts to build its computing power by more than a third in less than three years, with an eye on benefiting local suppliers and strengthening technology self-reliance as U.S. restrictions pressure the country's industry.

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