The U.S. intends to prolong a special permission for South Korean-based Samsung Electronics and SK Hynix to import chipmaking tools for their Chinese fabs without additional licensing, reports Reuters citing Yonhap. Previously, these firms had a year-long approval for such imports. If these companies receive grants from the CHIPS & Science Act funds, all the restrictions regarding investments in China will apply to them.
The U.S. Commerce Department has been in active dialogue with Samsung Electronics and SK Hynix about the types of tools that can be imported for their fabs in China. This decision is pivotal, considering the future strategies of these companies include installing new tools to adopt new process technologies at their fabs in China so they can retain cost-effective production there. While the U.S. would prefer memory to be made outside of China, a memory shortage could potentially hurt American companies — so the government is willing to make exceptions.
There is, of course, a catch. If Samsung and SK Hynix apply for funding covered by the U.S. CHIPS & Science Act, there will be restrictions to their investments in China.
In the past year, both Samsung and SK Hynix were granted the green light by the U.S. Commerce Department to transport necessary machinery for chip fabrication in China. This was a significant move, and it eliminated the need for them to apply for separate licenses for a year.
To streamline this process, the U.S. Department of Commerce plans to revise its 'validated end user' list. This list specifies which companies are allowed to import certain technological tools. Once a company is added to this roster, it does not need to secure permissions for individual export instances.
Both Samsung Electronics and SK Hynix have made substantial financial commitments in their fabs in China. Specifically, Samsung has its NAND flash memory unit in Xian, while SK Hynix operates its DRAM chip unit in Wuxi and a 3D NAND fab in Dalian.
