The US will Indefinitely Extend The China Waiver for South Korean Chipmakers – Yonhap

According to the Yonhap news agency on Wednesday, the United States is anticipated to renew a waiver given to South Korean chipmakers Samsung Electronics (005930.KS) and SK Hynix (000660.KS) about the requirement for licences to export American chip equipment to China.

According to unidentified sources cited by Yonhap, the U.S. Commerce Department has discussed specifics with South Korean chipmakers over which technology may be utilised in China. It also indicated that the U.S. would make similar statements as early as this week.

The U.S. Commerce Department granted the chipmakers permission to supply the machinery required for chip fabrication in China for a year without the need for new licences last year.

The U.S. Department of Commerce will revise its “validated end user” list, which specifies which organisations can accept exports of certain technologies, to let Samsung and SK Hynix to continue acquiring specific U.S. chipmaking tools.

Once a name is on the list, no more export authorization is required.

SK Hynix and Samsung Electronics declined to comment.

According to Yonhap, the Department of Commerce had been in talks with Samsung and SK Hynix to identify equipment that could be added to their Chinese production lines while taking into account the companies’ future plans. Upgrades to existing equipment are also required to support business in the coming years.

While SK Hynix produces DRAM chips in Wuxi and NAND Flash in Dalian, Samsung Electronics manufactures NAND flash memory in Xian, China. Both businesses have invested billions of dollars in these facilities.

According to data from TrendForce, the corporations collectively own close to 70% of the worldwide DRAM industry and 50% of the NAND flash market.

Separately, the US Department of Commerce put restrictions in place in March for investors hoping to receive billions of dollars in subsidies under the CHIPS Act. These safety nets restrict the growth of semiconductor manufacture in China for 10 years after receiving funding.

Analysts anticipate that further information on the situation will be released soon.

The main application for US subsidies has been submitted by Samsung, which is constructing a chip plant in Texas to start shipping in late 2024. The company could learn the outcome by year’s end, according to people with knowledge of the situation who declined to be named because the material was confidential.