"US-China Conflict Hits SK Hynix's China Investment Hard (Comprehensive)"

US Halts China's Factory Modernization Plan
White House "Concerns Over Military Modernization Abuse"

[Image source=Reuters Yonhap News]

[Asia Economy Reporters Heungsun Kim and Hyunui Cho] SK Hynix's plan to introduce extreme ultraviolet (EUV) lithography equipment for the modernization of its semiconductor factory in China has hit a snag. This is because the Joe Biden administration in the United States has stepped in, citing that SK Hynix's plan poses a threat to national security. As the US-China technological hegemony competition intensifies, concerns that Korean companies could be directly impacted have become a reality.

Major foreign media outlets reported on the 18th, citing sources, that "the US government does not want advanced equipment to be brought into China," and that "SK Hynix's efforts to modernize its Chinese factory are at risk of being thwarted." They added, "SK Hynix, one of the world's largest semiconductor suppliers, could become the next casualty of the geopolitical conflict between the US and China."

Originally, SK Hynix planned to introduce EUV lithography equipment, which is essential for semiconductor fine processes, into its DRAM semiconductor factory in Wuxi, China, to establish an advanced production line. The Wuxi factory has accounted for half of SK Hynix's DRAM sales and is responsible for 15% of global production. If the modernization of the Wuxi factory's production line is delayed, it will inevitably have a significant impact on the global memory market. A source familiar with the matter said, "Because the proportion of new types of semiconductors produced by SK Hynix will increase in 2 to 3 years, EUV is necessary for cost reduction and production acceleration."

However, the US opposes the introduction of this equipment, which is necessary for the development of cutting-edge semiconductors, on the grounds that it could strengthen the Chinese military. A senior White House official did not directly comment on whether SK Hynix would be allowed to bring EUV equipment into China but said, "The Biden administration is focused on preventing China from using US and allied technology for advanced semiconductor production," adding, "because it could contribute to the modernization of China's military power."

If this situation prolongs, concerns are emerging that SK Hynix could be at a disadvantage compared to competitors Samsung Electronics and Micron Technology. Foreign media reported, "Both Samsung Electronics and Micron Technology have transitioned to EUV, but they have not introduced it in regions subject to export restrictions to China."

In response, SK Hynix stated, "The introduction of EUV lithography equipment began domestically for the first time this year, and semiconductor production using it is still in the early stages," adding, "It is expected to take a considerable amount of time before it is brought into China. We will closely monitor and respond to future developments while complying with international regulations."

This content was produced with the assistance of AI translation services.