SEOUL – The US will allow the export of equipment to South Korean semiconductor factories in China, Seoul’s presidential office said on Monday, removing a major source of uncertainty for the country’s massive chip sector.
Tech giant Samsung Electronics and smaller rival SK Hynix are nearing the end of one-year waivers from US export restrictions aimed at China’s burgeoning semiconductor sector.
Washington and its allies have curtailed China’s access to major markets and advanced technology – including chipmaking – over fears its products could give Beijing the ability to spy on their networks.
The United States announced export restrictions in October 2022 on chips used in supercomputing, as well as stricter requirements on the sale of equipment used to produce semiconductors.
The restrictions triggered concerns that the production of advanced chips at Chinese plants operated by Samsung Electronics and SK Hynix could be disrupted.
But with their waivers set to end, the US government has designated the companies’ factories “verified end users”, Seoul’s senior presidential secretary for economic affairs, Mr Choi Sang-mok, said on Monday.
The decision, which eliminates the need for a separate export approval process, means the “most significant trade issue of our semiconductor companies has been resolved”, he said.
It has “significantly alleviated companies’ uncertainties over their assembly lines in China”, he added.
Semiconductors have become a flashpoint issue between the US and China, which are locked in a fierce battle over access to chipmaking technology and supplies.
Taiwan said last week it has launched a probe to determine if four local firms violated US sanctions in helping Chinese tech giant Huawei build semiconductor factories.
Bloomberg reported that the companies involved were helping Huawei develop an “under-the-radar network” of Chinese chip plants.
The news emerged as US Commerce Secretary Gina Raimondo, testifying before Congress, described reports that Huawei was manufacturing advanced chips as “incredibly disturbing”.
In June, a former Samsung executive was charged with stealing company secrets worth hundreds of millions of dollars to set up a copycat chip factory in China.
Samsung Electronics is one of the world’s largest producers of chips and smartphones, and its parent group’s turnover is equivalent to about one-fifth of South Korea’s gross domestic product.
Like many of the world’s biggest chipmakers, a large portion of its production is based in China.
SK Hynix is the world’s No. 2 maker of Dram chips, used in computers and servers, and runs multiple plants in China. AFP
