Samsung Electronics and SK Hynix seem to face struggles in shipping critical equipment to their chipmaking operation in China, dealing a potential blow to the companies’ production in the world’s largest semiconductor market.
The Korean tech firm has depended on its massive chip factories in China to keep the world supplied with memory. The company has its two crucial plants in Xi’an and Wuxi, which make NAND flash and DRAM chips that are used in a vast range of devices, such as phones, AI servers, laptops, and game consoles.
Two years back, in 2023, the Biden administration granted a special waiver to Samsung for continuing to import US-made equipment, as these facilities are so crucial. On the other hand, Washington tightened the screws on China’s access to advanced chip technology.
According to a report from Bloomberg, the Trump administration announced it will cancel the privileges, giving Samsung 120 days before the changes take effect. This will cause the company to need to apply for a license each time it wants to import chip-making tools.
SK Hynix is also reported to be losing its waiver alongside Samsung. Reportedly, the Commerce Department has said it has no plans to approve requests that would allow capacity expansion or technology upgrades. This means that Samsung’s Chinese fabs have the right to keep running but are not allowed to modernize, which will prevent them from standing strong against its rivals in Korea and the US. It remains to see exactly how Samsung will deal with this restriction.
