US Revokes Chip Production Permissions For Samsung, SK Hynix, Intel In China—Beijing 'Opposes' Move

The U.S. has revoked the authorizations that allowed Samsung SSNLF and SK Hynix to receive American semiconductor manufacturing equipment in China.US Ends Special Equipment Access For Korean ChipmakersThe U.S. Commerce Department has revoked the exemptions it had previously granted to Samsung and SK Hynix, allowing them to receive U.S. semiconductor manufacturing equipment in China. The companies will now need to obtain licenses to purchase this equipment for their Chinese operations, Reuters reported.These chipmakers will now require licenses to procure the equipment for China. Intel INTC, despite divesting its Dalian, China, unit earlier this year, was also included in the list of companies losing their authorization for China. The revocations will be effective in 120 days, as stated in the federal filing. This move could potentially impact the production of more advanced chips by Korean chipmakers with facilities in China, according to Chris Miller, author of “Chip War.” This may provide an advantage to domestic Chinese equipment manufacturers as well as Micron MU, a leading U.S. rival to Samsung and SK Hynix in the memory chip market.SK Hynix stated, “will maintain close communication with both Korean and the U.S. governments and take necessary measures to minimize the impact on our business.”The China’s Commerce Ministry stated that it, “opposes the U.S. move.”Chip Rules May Deepen Global Memory CrunchThe U.S. has been taking steps to tighten regulations on semiconductor equipment sales to China. This move is seen as a strategic step to limit China’s technological advancement and boost U.S. and domestic chipmakers’ positions in the global market.Earlier in June, SK Hynix had secured custom high-bandwidth memory (HBM) orders from Nvidia NVDA, Microsoft MSFT, and Broadcom AVGO, indicating a growing demand for specialized memory chips in the AI and high-performance computing sectors. This move by the U.S. may impact SK Hynix’s ability to meet this demand.However, by August, DRAM prices had soared as Chinese manufacturers began to prioritize AI chips and strengthen the country's semiconductor self-reliance, leading to a supply crunch for older formats like DDR4. The recent revocations by the U.S. government may further exacerbate these supply challenges.This move comes amid a tariff truce between the U.S. and China, with tariffs set to remain unchanged until November. The ongoing trade war has affected everything from the supply of rare earths needed by U.S. industry to China’s purchase of US soybeans. China Doesn’t Need Nvidia Anymore: Alibaba’s New Chip Is A Challenge To Washington Image via Shutterstock