Korean Chipmakers Face Uncertainty As US Mulls End To China Equipment Waivers

This move is reportedly being driven by Jeffrey Kessler, a former US Commerce Department official during the Trump administration, who described it as part of a broader crackdown

According to a report by The Wall Street Journal, the South Korean companies were informed last week of the U.S. government's intention to cancel these waivers

Source : Freepik

South Korean chipmakers are experiencing tensions over their operations in China, weighed down by reports from Washington, as they consider revoking waivers that have allowed them to bring in American chip equipment for facility upgrades, as reported by the Korea Herald.

Earlier, the waivers were part of the Biden administration's export controls aimed at restricting China's access to advanced chip technology. However, to prevent disruptions to global supply chains, major chipmakers like Samsung, SK hynix, and TSMC were granted one-year exemptions.

According to a report by The Wall Street Journal, the South Korean companies were informed last week of the U.S. government's intention to cancel these waivers.

This move is reportedly being driven by Jeffrey Kessler, a former US Commerce Department official during the Trump administration, who described it as part of a broader crackdown on critical US technology going to China. White House officials have also indicated that the licensing system for chip equipment could resemble China's controls on rare-earth exports.

While the US has increased efforts to curb China's semiconductor growth, South Korean chipmakers have taken steps to mitigate potential risks, suggesting that the immediate impact might be limited. However, the companies remain cautious as their Chinese fabs contribute significantly to their overall production.

Industry experts told the Korea Herald that the U.S. regulations are primarily aimed at Chinese companies, potentially allowing for exemptions for global firms. They also note that companies have had time to prepare for such restrictions, implying the latest development might not pose a significant immediate threat.

Samsung Electronics has a NAND flash production facility in Xi'an and a chip packaging plant in Suzhou, with China accounting for about a quarter of its chip sales. SK hynix operates a DRAM fab in Wuxi, a packaging facility in Chongqing, and a NAND flash plant in Dalian (acquired from Intel), producing roughly 40% of its total DRAM and 30% of its NAND flash in China. SK hynix recently completed a final payment for the Dalian facility.

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)