The US is making it more difficult for chipmakers Samsung and SK Hynix to produce chips in China by revoking authorizations that allowed the companies to receive American semiconductor manufacturing equipment there, according to the Federal Register.
The US Commerce Department had given the companies exemptions to sweeping restrictions created in 2022 on the sale of US semiconductor equipment to China.
The companies will now need to obtain licenses to buy the equipment for China. The federal filing also included Intel among the companies that lost their authorization for China, although Intel sold its Dalian, China, unit in a deal that was finalized this year.
The revocations will take effect in 120 days, according to the posting.
The Commerce Department said in a statement that the US to grant license applications to allow the companies to operate their existing facilities in China, but does not intend to grant licenses to expand capacity or upgrade technology.
SK Hynix said in a statement that it “will maintain close communication with both Korean and the US governments and take necessary measures to minimize the impact on our business.”
Samsung did not respond to a request for comment.
South Korea’s government has explained to the Commerce Department “the importance of a stable operation of our semiconductor companies in China for the stability of the global semiconductor supply chain,” the industry ministry said.
Seoul will continue discussions with Washington to minimize the impact on South Korean companies, the ministry said.
A spokesperson for China’s commerce ministry said Beijing “opposes the US move” and “will take necessary measures to resolutely safeguard the legitimate rights and interests of enterprises.”
The licensing change will likely reduce sales to China by US equipment makers KLA Corp., Lam Research and Applied Materials. The companies did not immediately respond to requests for comment.
In June, when the Commerce Department raised the possibility of revoking the authorizations, a White House official said the US was “just laying the groundwork” in case the truce in trade talks between the two countries fell apart.
In July, the two allies and major trading partners announced a deal on tariffs, but South Korean President Lee Jae Myung came away from a summit with President Trump this week without finalizing the agreement in writing.
The US and China are operating under a tariff truce, with levies of 30% on Chinese imports to the US and 10% Chinese duties on US goods locked in until November. The trade war between the world’s two largest economies has affected everything from rare earths needed by US industry to China’s purchase of US soybeans.
The White House did not have an immediate comment.
“This move will make it harder for Korean chipmakers with facilities in China to continue producing more advanced chips,” said Chris Miller, author of “Chip War.”
The move may help domestic Chinese equipment makers, whose tools can fill gaps. It also may help Micron, a major US competitor to South Korea’s Samsung and SK Hynix in the memory chip sector.
“If this isn’t accompanied by further steps against (Chinese chipmakers like) YMTC and CXMT, it risks opening market space for Chinese firms at the expense of the Korean firms,” Miller said.
Thousands of license applications by US companies to export goods and technology to China also have been in limbo in recent months, creating a massive backlog, as Reuters reported this month, including for billions of dollars’ worth of semiconductor manufacturing equipment.
Foreign chipmakers like Samsung and Hynix now have what is known as Validated End User status, which allows US suppliers to ship goods to them “more easily, quickly and reliably,” as the Commerce Department says on its website, than they would if export licenses were required. That VEU status will be removed.
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