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Samsung and SK Hynix granted permission to export U.S. chipmaking tools to Chinese facilities

The U.S. government has provided updated general authorizations to Samsung Electronics and SK hynix, prominent South Korean chip manufacturers, enabling them to continue supplying specific U.S. semiconductor manufacturing equipment to their facilities in China.

Saumya Nigam Edited By: Saumya Nigam @snigam04 New Delhi Published on: October 15, 2023 12:35 IST
Samsung, SK Hynix, chip manufacturing, China
Image Source : FILE U.S. allows Samsung and SK Hynix to ship chip manufacturing equipment to China

The U.S. government has granted Samsung Electronics and SK hynix, two major South Korean chip manufacturers, updated general authorizations to continue supplying specific U.S. semiconductor manufacturing equipment to their facilities in China. This decision comes as a result of the Commerce Department's Bureau of Industry and Security (BIS) designating both companies as "validated end users (VEU)," which eases the licensing requirements for Korean firms operating in China. Last October, the U.S. imposed restrictions on exports of advanced chipmaking tools to Chinese facilities as a measure to slow down Beijing's technological advancements.

Samsung and SK hynix had previously been granted a one-year waiver, which was set to expire this month. The BIS explained that "Samsung's and SK hynix's PRC facilities are Validated End-Users. VEUs can apply for, and after national security review and approval by the U.S. government, obtain a general authorization to acquire certain items rather than seeking multiple individual licenses." PRC refers to China's official name, the People's Republic of China. The recent rule update specifies the items that can be exported to these companies under the VEU authorization.

Alan Estevez, Under Secretary of Commerce for Industry and Security, emphasized that the VEU program is a vital tool for ensuring that U.S. national security objectives are met. He stated, "These authorizations are consistent with our close partnership with the Republic of Korea (ROK)." The official name of South Korea is the Republic of Korea. He further highlighted the importance of this collaboration, as both countries and their companies play crucial roles in the global semiconductor supply chain, particularly for memory chips.

Samsung, the world's leading memory chip manufacturer, operates a chip manufacturing plant in Xian, China, contributing to approximately 40 per cent of its global NAND flash production. Additionally, the company runs a semiconductor packaging facility in Suzhou. SK hynix, a smaller rival to Samsung, has several plants in China, including one in Wuxi, which is responsible for about half of its global DRAM chip production.

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The decision to update the authorizations for Samsung and SK hynix ensures the continued collaboration between the United States and South Korea in the semiconductor industry and supports a secure and transparent supply chain, especially for memory chips.

Inputs from IANS

 

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