"US Considering Restrictions on Domestic NAND Equipment Shipments to China... Potential Impact on Samsung and SK Hynix"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The Biden administration in the United States, focused on curbing China's semiconductor rise, is reportedly considering restricting the shipment of U.S.-made semiconductor equipment to Chinese memory semiconductor companies. The restrictions are expected to focus on NAND flash equipment, raising concerns that domestic semiconductor companies such as Samsung Electronics and SK Hynix, which have memory semiconductor factories in China, could also be affected.

On the 1st (local time), major foreign media outlets cited multiple sources reporting this. Although the discussions are still in the early stages, if measures are taken, shipments of U.S.-made semiconductor equipment to NAND manufacturing plants in China are expected to be banned, according to foreign media.

Sources also anticipate that exports of semiconductor equipment necessary for producing NAND with 128 layers or more will be prohibited. Foreign media reported that semiconductor equipment from U.S. companies Lam Research and Applied Materials is primarily used in the production of NAND with 128 layers or more.

The U.S. Department of Commerce has not made specific comments regarding export restrictions but stated that "the Biden administration is focused on preventing China's efforts to manufacture advanced semiconductors that pose a serious risk to U.S. national security," according to foreign media.

Sources believe that if the Biden administration decides to take action, Korean memory semiconductor companies could also be impacted. Samsung Electronics has NAND production facilities in Xi'an and test and packaging plants in Suzhou, while SK Hynix owns a DRAM factory in Wuxi, a back-end process plant in Chongqing, and a NAND factory in Dalian.

Experts evaluate that this move will likely be the first case where the U.S. imposes export controls targeting Chinese memory semiconductor production rather than semiconductors used in Chinese military equipment. It appears to be a response to China's rapid growth in the semiconductor industry centered on memory semiconductors, which have relatively lower process levels, instead of foundries requiring advanced processes and related equipment.

It is also interpreted as an effort to protect U.S. semiconductor companies such as Western Digital and Micron, which hold some market share in the NAND market. Earlier, the White House mentioned in a report last June that Micron and Western Digital were facing price pressure in the NAND market due to YMTC's low-price strategy, calling it a "direct threat."

According to market research firm TrendForce, Samsung Electronics ranked first in the NAND market in the first quarter of this year with a 35.3% market share, followed by Japan's Kioxia at 18.9%, SK Hynix (including Solidigm) at 18.0%, Western Digital at 12.5%, and Micron at 10.9%. YMTC's market share is reported to have nearly doubled compared to a year ago, reaching around 5%.

This report came just three days after Bloomberg News reported that the Biden administration recently strengthened export controls on cutting-edge U.S.-made semiconductor manufacturing equipment to China. On the 29th of last month, Bloomberg reported that in the past two weeks, the U.S. Department of Commerce sent official letters to all domestic semiconductor equipment companies instructing them not to export equipment applying manufacturing technology finer than 14 nanometers (nm; one billionth of a meter) to China. Lam Research CEO Tim Archer stated in a recent conference call with analysts, "We have been notified that government export restrictions have been expanded. The directive is not to export semiconductor equipment applying manufacturing technology finer than 14nm to China."

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