Samsung, SK hynix authorised to send certain US chipmaking tools to China plants

Washington, Oct 15

The US government has officially issued a rule updating general authorisations for Samsung Electronics and SK hynix to keep supplying their China-based plants with certain US semiconductor manufacturing equipment.

The Commerce Department's Bureau of Industry and Security (BIS) announced the rule after it notified the Seoul government of the decision to designate the two chipmakers as "verified end users (VEU)" -- a status that reduces the licensing burden on the Korean firms with operations in China.

In October last year, the United States published the rule restricting exports of certain advanced chipmaking tools to China-based facilities in an apparent bid to slow Beijing's technological advances.

The two Korean chipmakers received a one-year waiver, which would have expired this month, reports Yonhap news agency.

"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 authorisation to acquire certain items rather than seeking multiple individual licenses," the BIS said in a statement. PRC refers to China's official name, the People's Republic of China.

"The rule updates the items that may be exported to these companies under the VEU authorisation," it added.

Under Secretary of Commerce for Industry and Security Alan Estevez underscored that the VEU program is an "important tool for ensuring continued partnership that achieves our national security objectives."

"These authorisations are consistent with our close partnership with the Republic of Korea (ROK)," he said, using the official name of South Korea.

"The U.S. and ROK and our companies play a critical role in the global semiconductor supply chain, and today's announcement demonstrates the strength of our partnership and commitment to a secure and transparent supply chain, particularly for memory chips," he added.

Samsung, the world's largest memory chip maker, runs a chip manufacturing plant in the Chinese city of Xian, which accounts for some 40 percent of its global NAND flash production. In Suzhou, the chipmaker runs a semiconductor packaging factory.

Its smaller rival SK hynix currently operates multiple plants in China, including one in the eastern city of Wuxi, where it manufactures about half of its global DRAM chips.