SK hynix's chip plant in Wuxi, China / Courtesy of SK hynix

Samsung Electronics and SK hynix welcomed Washington's decision to indefinitely suspend restrictions on exporting U.S.-made chip equipment to their factories in China, saying the uncertainty in their operations has been resolved, according to the Korean chip makers, Tuesday.

On Monday, Choi Sang-mok, senior presidential secretary for public relations, said Samsung and SK received the U.S. government's approval for their chip manufacturing plants in China to import U.S.-made semiconductor equipment without applying for permission.

“The U.S. government has informed us of its final decision to designate Samsung Electronics and SK hynix's semiconductor factories in China as verified end users (VEUs) under U.S. export control regulations, allowing them to supply U.S.-made equipment without a separate license process or time limit,” Choi said during the briefing.

In an effort to curb Beijing's advances in semiconductor technology, Washington has imposed export restrictions on sending semiconductor technology and equipment to China. In October 2022, the U.S. government gave Samsung and SK one-year waivers from the export restrictions, which were scheduled to end on Oct. 11.

The VEU designation is a blanket license system that allows companies to export designated items only if they have received approval from the U.S. government, and the companies receiving that designation means that the export controls have been effectively suspended indefinitely.

Choi Sang-mok, senior presidential secretary for public relations, gives a briefing on the U.S. decision to ease export controls on chip equipment for Samsung Electronics and SK hynix's factories in China at the presidential office in Seoul, Monday. Yonhap

“We understand that related companies such as Samsung Electronics and SK hynix have already been notified of the U.S. government's decision, which will take effect immediately,” Choi said. “This is the result of a concerted response by the government and companies based on the foundation of the U.S.-Korea alliance, which has been strengthened under the Yoon Suk Yeol administration.”

Samsung operates a Chinese plant in Xi'an while SK hynix produces chips in Wuxi and Dalian. Korean companies are key suppliers of 60.5 percent of the world's memory semiconductor production. Washington's suspension of these export restrictions recognizes Korea's importance in the global semiconductor supply chain.

With the decision, Samsung and SK are able to continue sending chip equipment to their factories in China. Bringing in new equipment to their Chinese factories has been an urgent issue to replace outdated equipment. They will be able to make the necessary repairs and upgrades to keep their existing facilities running.

“Through close consultations between governments, the uncertainty regarding the operation of chip facilities in China has been largely resolved,” a Samsung Electronics spokesman said. “We will continue to do our best to stabilize the supply chain of the global chip industry through close consultations with governments.”

An SK spokesman also said they welcome the U.S. government's decision. “This will greatly contribute to the stabilization of the global semiconductor supply chain. We will continue doing our best to develop the global semiconductor industry by faithfully complying with the laws and regulations of each country.”