Ministry of Trade, Industry and Energy: "Minimizing Impact on Korean Companies from US HBM Export Controls... Consultation Window Opened"

On the 2nd (local time), as the U.S. government announced export control measures on high-bandwidth memory (HBM) and advanced semiconductor equipment, the South Korean government explained that it would be able to minimize the impact by switching to export methods permitted under future U.S. regulations. It analyzed that the export controls on semiconductor equipment would have little impact on domestic companies.

The U.S. Department of Commerce’s Bureau of Industry and Security newly added dynamic random-access memory (RAM) semiconductors with specific specifications (memory bandwidth density exceeding 2GB/s/㎟) to the list of controlled export items starting January next year.

According to the U.S. announcement, all currently produced HBMs fall under the control list. To export these products to countries designated by the U.S. as weapon embargo countries (including China and 24 other countries), permission from the U.S. Department of Commerce is required. However, HBMs packaged together with logic chips are not controlled. HBM2 may be eligible for license exceptions if certain conditions are met.

Additionally, starting January next year, the U.S. will newly add 24 types of semiconductor equipment, including heat treatment and measurement equipment, as well as three related software items, to the export control list, in addition to the 29 types of advanced semiconductor equipment currently controlled. Currently, export controls apply to equipment used in advanced logic and memory semiconductor manufacturing such as lithography, etching, deposition, and cleaning equipment.

Along with this, from today, the U.S. added 140 companies and institutions, including advanced semiconductor manufacturing fabs located in China and semiconductor equipment manufacturers, to the Entity List due to national security concerns.

Also, on this day, the U.S. designated 'Foreign Direct Product Rule (FDPR)' exemption countries only for semiconductor equipment. The U.S. designated 33 countries, including Japan and the Netherlands, which already implement semiconductor equipment export controls at a level equivalent to the U.S. or have low relevance to semiconductor equipment, as FDPR exemption countries. Even for exemption countries, the actual control effect is similar. South Korea has not yet implemented semiconductor equipment export controls at the U.S. level and thus is not included in the exemption countries.

The U.S.’s export control measures on HBM and semiconductor equipment are subject to the Foreign Direct Product Rule. Accordingly, even HBM and semiconductor equipment produced in third countries outside the U.S. may be considered U.S.-origin products and subject to control if they meet certain criteria. In such cases, exporting these products to U.S. security concern countries or entities on the Entity List requires permission from the U.S. Department of Commerce.

Regarding this, an official from the Ministry of Trade, Industry and Energy stated, "Since many global semiconductor companies use U.S.-controlled U.S. technology, software, and key equipment for product design and manufacturing, FDPR is expected to apply." He added, "There may be some impact on our companies producing HBM, but by switching to export methods permitted under future U.S. regulations, the impact can be minimized."

The Ministry also analyzed that, in the case of semiconductor equipment, the controlled items are set as advanced-level semiconductor equipment of significant importance from the U.S. national security perspective, and only a small number of domestic companies are related, so the impact is expected to be limited.

According to the Ministry, the U.S. Department of Commerce plans to apply the 'presumption of denial' principle by default when processing license applications for exports of controlled items under this measure. However, exports to our companies in China that have already obtained VEU (Validated End-User) approval will be allowed regardless of this measure.

The Ministry stated, "Although this measure is independently implemented by the U.S. from a national security perspective, close consultations have been held between the two countries considering the Korea-U.S. alliance and the impact on our companies." It added, "The government has continuously communicated with our industry to minimize the impact on our companies and collected opinions. Both the Korean and U.S. governments agreed to closely monitor the impact of this measure and to work to prevent unexpected damage to companies in both countries."

Meanwhile, the Ministry announced that on the 4th, it will hold a meeting with the semiconductor equipment industry to share detailed information about the U.S. measures. It also plans to open and operate export control consultation desks at the Korea Semiconductor Industry Association (KSIA) and the Korea Trade Security Institute (KOSTI). The Ministry will actively support the industry by holding export control system briefings and distributing guidelines to companies exporting to China and will focus on discussing difficulties faced by our companies with the U.S. government as soon as possible.

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