Samsung Electronics Co. 4GB Double-Data-Rate (DDR) 3 memory module, top, and 8GB DDR 3 memory modules are arranged for a photograph in Seoul, South Korea, on Tuesday, July 9, 2019.
SeongJoon Cho | Bloomberg | Getty Images
South Korean chip giants Samsung and SK Hynix might be allowed to ship U.S. semiconductor manufacturing equipment to their China factories indefinitely without separate U.S. approvals, South Korea’s Yonhap News Agency reported on Monday.
The U.S. government has already notified the 2 firms of its decision which takes effect immediately, Choi Sang-mok, Seoul’s senior presidential secretary for economic affairs, told reporters on Monday.
Previously, Samsung Electronics and SK Hynix obtained one-year waivers from the U.S. to proceed importing advanced tools for his or her China plants. The waivers would have expired this month.
“The U.S. government’s decision signifies that probably the most significant trade issue of our semiconductor firms has been resolved,” said Choi.
The newest development quells concerns Samsung and SK Hynix have about their chip production in China, which partly relies on U.S. equipment.
China is a key manufacturing hub – accounting for 40% of Samsung’s total flash memory chips (NAND) production capability, in accordance with a Fitch report. It also accounts for 40%-50% of SK Hynix’s dynamic random access memory (DRAM) chips and 20% of its NAND capability.
Samsung Electronics and SK Hynix are the world’s largest and second-largest DRAM memory chipmakers, in accordance with data from market research firm TrendForce, with U.S.-based Micron trailing in third place.
Last October, the U.S. implemented sweeping rules aimed toward limiting China’s ability to acquire or manufacture high-tech semiconductor chips. Washington is worried that China would use such high-tech chips to advance its military capabilities.
Beijing responded by pouring billions of dollars into its domestic semiconductor industry, which is making some progress toward more advanced chips.
For instance, Huawei quietly launched a latest 5G-enabled smartphone last month despite existing U.S. sanctions. The 5GÂ processor present in the phone was surprisingly produced by domestic firm Semiconductor Manufacturing International Corporation. The component was way more advanced than what many industry observers thought the corporate could produce.
