| SK hynix's chip plant in Wuxi, China / Courtesy of SK hynix |
By Baek Byung-yeul
Samsung Electronics and SK hynix earned one-year waivers from the United States for their chip-making factories in China to import semiconductor equipment without applying for permission from Washington, according to the companies and industry sources, Wednesday.
As part of its countermeasures to prevent China from obtaining advanced chip technologies, the U.S. Department of Commerce announced a new export control measure that prohibits U.S.-based companies from exporting their semiconductor equipment to chip production companies in China.
Under the measure, multinational companies operating in China, including Samsung and SK hynix, are required to win approval from Washington when they deliver chip equipment to their Chinese factories on a case-by-case basis.
The measure was expected to disrupt the production plans of Samsung and SK hynix, which generate enormous amounts of profits by selling their memory chips in China. Samsung operates its Chinese plant in Xi'an while SK hynix produces chips in Wuxi.
However, SK hynix, one of Korea's two leading memory chip makers, said that the U.S. Department of Commerce granted it a one-year exemption.
“The U.S. government has clarified its position with respect to its latest export control regulations, issued by the U.S. Department of Commerce's Bureau of Industry and Security on Friday. In an official letter from the U.S. Bureau of Industry and Security (BIS), the agency assured SK hynix that the company, as well as its current suppliers and business partners, is still authorized to engage in activities necessary to maintain current production of integrated circuits in China for one year without further licensing requirements,” SK hynix said in a statement.
“Our discussions with the Department of Commerce led to an approval to supply equipment and items needed for development and production of DRAM semiconductors in Chinese facilities without additional licensing requirements,” it added.
A Samsung Electronics spokesman said, “There is nothing to say about the issue.” However, the world's largest memory chip maker is also said to have received the same exemption, according to the industry sources.
Currently, Samsung and SK are delivering various kinds of equipment to upgrade their chip plants in China. Since there are many types of equipment, the process to win approval from Washington would be too complicated and take too much time if the Korean companies have to ask for U.S. permission for each piece of equipment.
Given there's no guarantee that the exemption measure can be extended after a year, Samsung and SK hynix are expected to discuss with the U.S. government the issue of continuing their businesses in China without a hitch in cooperation with the Korean government.
“Along with the Korean government, we will continue our consultations with the Department of Commerce and make our utmost efforts to operate our plants in China in a stable way, while continuing compliance with applicable laws and regulations,” SK hynix said.