Under a notice published Friday, the Commerce Department said it was revoking waivers for Samsung and SK Hynix to use US technologies in their Chinese operations. The semiconductor companies had been operating in China under regulations that allow them to import chipmaking equipment without applying for a new license each time.
The Trump administration’s move would revise what’s known as the validated end user, or VEU, rules, handicapping the ability to make chips in the country and jeopardizing Beijing’s access to certain technologies.
The waivers date back to 2023 when then-President Joe Biden’s administration moved to allow the South Korean chipmakers to acquire the equipment they need to sustain and expand their giant operations in China. Washington had effectively granted an indefinite waiver on broader restrictions banning the shipment of advanced chipmaking gear to the country.
SK Hynix and Samsung didn’t immediately respond to emailed requests for comment.
In a statement announcing the decision, the Commerce Department said that it has no intention of granting licenses that would allow companies to “expand capacity or upgrade technology” at manufacturing facilities in China. The agency indicated that the move was intended to end a break that it saw as aiding foreign producers without any similar benefit for American manufacturers.
“The Trump administration is committed to closing export control loopholes — particularly those that put US companies at a competitive disadvantage,” Under Secretary of Commerce Jeffrey Kessler, who oversees export control programs, said in the statement. “Today’s decision is an important step towards fulfilling this commitment.”
The companies have 120 days until the waiver expires, according to an announcement in the US Federal Register. Companies can seek licenses to continue operations. The notice also listed a unit of Intel Corp. that has since been acquired by SK Hynix.
Both Samsung and SK Hynix rely on China for a sizable portion of their memory chip production capacity. The two South Korean companies make components that are incorporated into smartphone and consumer electronics assembled in the country.
The removal of the waiver will have a small impact on the market for semiconductor machinery, according to research from Bernstein. Non-Chinese companies only spent about $2 billion on new gear for their factories in that country in 2024, accounting for less than 2% of total industry sales on equipment last year.
Plants in China owned by overseas companies do have an outsized influence on memory chip supply, though. They account for 10% of computer memory output and 15% of storage chips, according to the report.
Such chips are crucial parts of smartphones, supercomputers and other products vital to the technology industry, including Apple Inc.’s iPhones and Nvidia Corp. processor-based AI hardware. They all depend on a steady supply of both types of memory chips.
The US decision emerged days after President Donald Trump met his South Korean counterpart, President Lee Jae Myung, at the White House. In their meeting Monday, the two men discussed a recently sealed agreement that set tariffs on South Korean goods at 15%, sparing the country from the 25% that Trump had threatened.
South Korea’s Ministry of Trade, Industry and Energy said in a statement Friday that the US government had briefed officials before the announcement, according to the Yonhap news agency. The agency said it would work to minimize disruption for South Korean businesses, it said.
“The government has been closely communicating with the US Department of Commerce on possible adjustments to the VEU system, stressing the importance of smooth operations of our chipmakers’ Chinese facilities for global semiconductor supply chain stability,” the ministry said, according to Yonhap.
With assistance from Ian King.
This article was generated from an automated news agency feed without modifications to text.
