South Korea Semiconductor Lifeline... Presidential Office: "US Supplies Equipment to Samsung and SK China Plants Without Permission" (Comprehensive)

China designates domestic factories as 'Verified End Users' (VEU) under comprehensive licensing
Choi Sang-mok, Senior Secretary for Economic Affairs: "Effectiveness upon notification... major trade issues temporarily resolved"
Korean companies vital in global semiconductor supply chain... "Consensus between South Korea and the U.S."

The U.S. government has made a final decision to supply American semiconductor equipment to Samsung Electronics and SK Hynix's factories in China without any separate approval procedures or deadlines, the Presidential Office announced on the 9th. This is expected to significantly reduce the uncertainty surrounding the domestic semiconductor industry’s business in China.

Choi Sang-mok, Senior Secretary for Economic Affairs, held a briefing at the Yongsan Presidential Office in the afternoon and said, "I understand that the related decision has also been notified to Samsung and related companies," adding, "This decision takes effect immediately upon notification."

This follows the U.S. administration recently informing South Korea through export control authorities and the National Security Council (NSC) economic security dialogue channel of its intention to designate Samsung Electronics and SK Hynix’s semiconductor factories in China as "Verified End Users" (VEU). VEU is a type of comprehensive license that allows exports only to pre-approved companies for designated items. Being included in the VEU means there is no need to obtain individual licenses separately, effectively resulting in an indefinite suspension of U.S. export controls.

Previously, the U.S. government restricted the export of American technology and equipment to China for processes such as DRAM below 18 nanometers (nm; 1 nm = one billionth of a meter), NAND flash with 128 layers or more, and logic semiconductors below 14 nm. However, a one-year grace period had been granted to Korean and Taiwanese semiconductor companies operating large-scale production facilities in China.

With this recent U.S. measure, Samsung Electronics and SK Hynix can now establish long-term investment and operational plans for their semiconductor factories in China. Currently, Samsung operates a NAND flash factory in Xi’an, China, while SK Hynix has DRAM and NAND flash factories in Wuxi and Dalian, respectively.

Senior Secretary Choi also evaluated, "This U.S. government decision signifies the resolution of the biggest trade issue for our semiconductor companies." He added, "The uncertainty regarding the operation and investment of our semiconductor companies’ factories in China has been greatly alleviated, allowing them to calmly pursue global management strategies in the long term. This achievement is the result of the government and companies working together on the solidified Korea-U.S. alliance under the Yoon Suk-yeol administration."

He further mentioned, "Our semiconductor companies are key suppliers and equipment demanders, accounting for 60.5% of global memory semiconductor production," and noted, "The mutual understanding between Korea and the U.S. regarding the importance of our companies in the global semiconductor supply chain is believed to have had a significant impact on this U.S. government decision."

Meanwhile, the Presidential Office also evaluated that Korean eco-friendly vehicles are increasing their market share in the U.S., leading to improvements in South Korea’s exports. Despite one year having passed since the implementation of the Inflation Reduction Act (IRA), which requires electric vehicles to use battery parts and minerals from countries of concern such as China below a certain ratio to qualify for subsidies (tax credits), visible results are being shown.

In fact, in August of this year, the first year after the IRA took effect, sales of Korean eco-friendly vehicles in the U.S. reached a record high of 14,000 units, and the market share in the U.S. increased to 10.9%, achieving the second-highest share in the industry. Compared to August last year, sales increased by 153%, and market share rose by 2.9 percentage points. At the time the IRA was implemented, Korean electric vehicles produced in the U.S. did not yet exist, putting the industry at a disadvantage, and actual sales of Korean eco-friendly vehicles in the U.S. declined for about three months immediately after the IRA’s enforcement.

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