The United States has granted permission to South Korean companies SK Hynix and Samsung to continue receiving specific chipmaking tools at their Chinese plants, according to a statement from the Commerce Department. This authorization exempts them from having to apply for new equipment licenses, a requirement imposed last October that restricted Chinese chipmakers’ access to these highly sought-after tools. The rules imposed in October aimed at limiting China’s technological and military advancements, but the unintended consequences on global chip production prompted the US to grant special authorizations to foreign chipmakers. This latest release formalizes and extends these authorizations. Taiwan Semiconductor Manufacturing Co (TSMC) also revealed that it has been authorized to continue operations in Nanjing and is in the process of obtaining a permanent authorization for its Chinese operations.
Samsung Electronics produces around 40% of its NAND flash chips in its Xian plant in China, while SK Hynix produces approximately 40% of its DRAM chips in Wuxi and 20% of its NAND flash chips in Dalian. Together, these companies control nearly 70% of the global DRAM market and 50% of the NAND flash market, as per data from TrendForce. The authorization from the US to continue chipmaking operations in China provides relief to SK Hynix, Samsung, and TSMC, ensuring uninterrupted production without the need for additional licenses. The move also reflects the importance of these South Korean and Taiwanese companies in the global chip supply chain and their role in meeting global demand for semiconductors.
In summary, the US has permitted SK Hynix and Samsung, as well as TSMC, to receive chipmaking tools at their Chinese facilities without the need for additional licenses. This comes in response to the October 2022 rules that restricted access to these tools for Chinese chipmakers. The authorization aims to avoid disruptions in chip production and provides relief to major players in the industry. SK Hynix, Samsung, and TSMC make significant contributions to the global chip market, and this decision acknowledges their importance in meeting global demand for semiconductors.
