Memory makers Samsung Electronics and SK Hynix have secured a continuous green light from the U.S. government to equip their Chinese plants with U.S. chipmaking equipment without the need for individual approvals, South Korea's presidential office and the companies reports Reuters. The move ensures that the two companies will be able to upgrade their Chinese fabs for new process technologies for years to come.
"Through close coordination with relevant governments, uncertainties related to the operation of our semiconductor manufacturing lines in China have been significantly removed," a statement by Samsung reads.
"We welcome the U.S. government's decision to extend a waiver with regard to the export control regulations," a statement of SK Hynix reads. "We believe the decision will contribute to the stabilisation of the global semiconductor supply chain."
The U.S. Commerce Department has been actively discussing with Samsung Electronics and SK Hynix regarding the kinds of equipment permissible for import to their manufacturing facilities in China. This determination is crucial, especially as both companies forward-looking strategies involve incorporating new tools to embrace advanced process technologies in their Chinese facilities, ensuring cost-efficient production. In the previous year, the U.S. Commerce Department approved both Samsung and SK Hynix to ship essential equipment for chip manufacturing in China. This important step removed the requirement for individual license applications for a span of one year. Now, the U.S. Department of Commerce grants the companies permission to ship all tools they need to their Chinese fabs without necessity to obtain an individual license.
This strategic shift is not just procedural. The U.S. Department of Commerce is making modifications to its "validated end user" list. By including Samsung Electronics and SK Hynix on this list, these firms will no longer be required to seek approvals for individual shipments of specific chipmaking instruments to their Chinese fabs, which have cost them billions and which are responsible for a significant portion of global 3D NAND and DRAM production.
The easing of these regulations has been met with open arms. Although the U.S. favors memory production outside of China, a potential memory deficit could adversely impact American businesses. Therefore, the government was open to making concessions. Naturally, there is a catch. Should Samsung and SK Hynix seek financial support under the U.S. CHIPS & Science Act, their investments in China will face limitations.
In Q2 2023 combined market shares of Samsung and SK Hynix reached almost 70% of the worldwide DRAM market and half of the NAND flash market, data from TrendForce shows. In terms of production capacity in China, Samsung Electronics produces approximately 40% of its NAND flash chips in its Xian-based facility in China, according to Reuters. On the other side, SK Hynix manufactures close to 40% of its DRAM chips in Wuxi and around 20% of its NAND flash chips in Dalian, Reuters estimates.
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Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
Sigh. Tomshardware editorial standard now is just terrible. Fabs in China and Chinese fabs are not the same thing.Reply
We Will see the results through many years !Reply
Considering nobody can even agree on where the lines are drawn for China on a map, it is understandable to an extent. For instance, is Taiwan or, "Chinese Taipei," considered China? If so, then the vast majority of chip production on the latest processes are in "China." I guess that may be besides the point though considering we are talking about two South Korean companies.wr3zzz said:Sigh. Tomshardware editorial standard now is just terrible. Fabs in China and Chinese fabs are not the same thing.