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In a significant development for the global technology industry, South Korean giants Samsung Electronics and SK Hynix have received an indefinite waiver from the United States government, allowing them to supply U.S. chip equipment to their factories in China without the need for separate approvals. This decision, announced on Monday by South Korea’s presidential office and confirmed by both companies, marks a pivotal moment for the semiconductor market.
Previously, these South Korean companies had faced uncertainties regarding their operations and investments in China due to the requirement for licenses to import U.S. chip equipment. The extension of this waiver brings a sense of stability and clarity to their long-term strategies. Choi Sang-mok, senior presidential secretary for economic affairs, emphasized the significance of this decision, stating that it would enable the companies to pursue global management strategies with confidence.
The U.S. Department of Commerce is currently updating its “validated end user” list, a crucial document that outlines which entities are eligible to receive exports of specific technology. Once Samsung and SK Hynix are included in this list, they will no longer need separate permissions for exporting U.S. chipmaking tools to their facilities in China. This streamlined process is expected to enhance the efficiency of their operations and ensure a smoother supply chain for semiconductor products.
Both Samsung and SK Hynix have made substantial investments in their chip production facilities in China. Samsung, for instance, manufactures approximately 40% of its NAND flash chips at its plant in Xian, China. Similarly, SK Hynix produces about 40% of its DRAM chips in Wuxi and 20% of its NAND flash chips in Dalian. These facilities play a crucial role in the companies’ global supply chain, and the waiver extension provides them with the confidence to continue their operations and investments in China without unnecessary bureaucratic hurdles.
This decision comes at a time when these two South Korean companies jointly dominate the global DRAM market with a share of nearly 70% and the NAND flash market with a share of 50%, as per data from TrendForce at the end of June. The stability and continued operation of their facilities in China are not only crucial for their businesses but also have a significant impact on the overall semiconductor market, ensuring a steady supply of memory chips for various electronic devices worldwide.
In response to the announcement, both Samsung and SK Hynix expressed their satisfaction with the U.S. government’s decision. Samsung, in an official statement, highlighted the removal of uncertainties related to their semiconductor manufacturing lines in China, emphasizing the collaborative efforts with relevant governments. SK Hynix echoed similar sentiments, welcoming the waiver extension and emphasizing its positive contribution to the stabilization of the global semiconductor supply chain.
This development underscores the interconnected nature of the global technology industry and the importance of international collaborations and agreements in ensuring the smooth functioning of supply chains. As the world continues to rely on advanced semiconductor technologies for various applications, such decisions play a pivotal role in shaping the future of the industry and facilitating innovation on a global scale.
