China may import semiconductor equipment... Samsung and Hynix pledge to strengthen global supply chain stability

Samsung Electronics and SK Hynix Exit Temporary Exemption
Separate Approval and Procedures No Longer Required for Semiconductor Equipment Import
"Uncertainty in Semiconductor Production Line Operation Resolved"

The United States has decided to apply semiconductor equipment export regulations to China but will exempt domestic semiconductor companies' factories in China. Samsung Electronics and SK Hynix responded positively, stating that the business uncertainties in China have been resolved. They also expressed their commitment to contributing to the stability of the global semiconductor supply chain.

On the 9th, Samsung Electronics and SK Hynix welcomed the removal of U.S. regulatory application regarding the introduction of semiconductor equipment to their factories in China. Last October, when the U.S. imposed semiconductor equipment export restrictions on China, it deferred the application of regulations to domestic companies for one year, but the resolution of business uncertainties was seen as significant.

A Samsung Electronics official said, "Through close consultations between governments of various countries, much of the uncertainty regarding the operation of semiconductor production lines in China has been resolved," adding, "We will continue to work closely with governments worldwide to do our best to ensure the safety of the global semiconductor industry's supply chain."

An SK Hynix official also welcomed the U.S. government's decision to extend the export control exemption, saying, "We believe this will greatly contribute to stabilizing the global semiconductor supply chain." They further stated, "We will faithfully comply with the laws and regulations of each country and do our best for the development of the global semiconductor industry."

Earlier, Choi Sang-mok, the Senior Secretary for Economic Affairs at the Presidential Office, said in a briefing that afternoon, "The U.S. government has decided to supply U.S.-made semiconductor equipment to Samsung Electronics and SK Hynix's factories in China without separate approval procedures or deadlines." He also explained, "This decision takes effect immediately upon notification."

The United States recently expressed its intention to designate Samsung Electronics and SK Hynix's semiconductor factories in China as 'Verified End Users (VEU)'. VEU refers to a comprehensive licensing method that allows exports of designated items to pre-approved companies. Being included in the VEU means that companies do not need to obtain individual licenses for each transaction, effectively deferring export controls indefinitely.

The semiconductor industry showed relief as the U.S. finalized the guardrail provisions of the CHIPS Act last month, easing concerns about business in China, and now has also exempted equipment export regulations. Given the significant semiconductor production volume in China and the ongoing U.S.-China competition for dominance in the semiconductor sector, the difficulties had been considerable.

Panoramic view of the SK Hynix factory in Wuxi, China /
[Photo by SK Hynix]

Last October, the U.S. required that sales of equipment and technology capable of producing advanced semiconductors?such as logic chips using FinFET technology (16 nanometers (nm; 1 nm is one billionth of a meter) to 14 nm or below), DRAM of 18 nm or below, and NAND flash with 128 layers or more?to Chinese companies must obtain approval. During this process, companies outside China with semiconductor factories in China, such as Samsung Electronics, SK Hynix, and Taiwan's TSMC, were granted a one-year regulatory exemption.

Samsung Electronics operates a NAND factory in Xi'an and a semiconductor back-end (packaging) factory in Suzhou, China. SK Hynix has a DRAM factory in Wuxi and a back-end factory in Chongqing. It also has a NAND factory in Dalian, acquired from Intel's NAND business unit. The Xi'an factory accounts for 40% of Samsung Electronics' total NAND production. The Wuxi and Dalian factories produce 40% of SK Hynix's DRAM and 20% of its NAND.

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