The U.S. government has revoked waivers to U.S. technology exports granted to Intel, Samsung, and SK hynix that permitted these companies to export advanced wafer fabrication equipment (WFE) from America to their Chinese facilities. The companies now face a 120-day deadline before these exceptions are lifted, after which they must obtain official licenses to continue shipping tools and parts to their Chinese facilities, reports Bloomberg.
For Samsung and SK Hynix in particular, the impact could be severe as they run major 3D NAND production facilities in China and need to ensure that their Chinese fabs operate on advanced nodes. A significant share of their DRAM and NAND output comes from Chinese facilities, so without continued U.S. authorization, these production lines may face disruption, which will add pressure to global memory supply and potentially accelerate a shift of high-tech manufacturing away from China. After exiting both the 3D NAND and SSD businesses several years ago, Intel no longer produces memory in China (though the Dalian fab that belongs to Solidigm, an SK hynix company, continues to operate), but the company still has assembly and test facilities in Chengdu as well as Intel Labs R&D operations that need advanced tools from the U.S.
While the new restrictions do not immediately halt operations, they create substantial uncertainty for Samsung, SK hynix, and to some degree Intel. The option to apply for licenses exists, but there is no assurance of approval, which forces these companies to prepare for the possibility of being cut off from the essential tools that are used in their fabs. Since the possibility of getting the licenses exists, it makes these companies vulnerable to the decisions of the U.S. government and more likely to abide to demands of President Trump's administration demands during negotiations.
After the U.S. introduced new export controls in October 2022, controls that targeted China's access to advanced tools used to make logic chips under 16nm, DRAM under 18nm, or NAND with 128+ layers, all companies operating fabs in China had to obtain export licenses on WFE they shipped to their Chinese facilities. To avoid major disruptions to global memory chip supply chains, The U.S. government granted temporary waivers to select American and multinational companies, including Intel, Samsung, and SK hynix, allowing these companies to maintain and upgrade their Chinese fabs.
However, without these waivers or licenses, Chinese fabs that belong to Samsung and SK hynix will begin to trail their production facilities in South Korea, which means that they will lose their business appeal to these companies in several years. Also, without spare parts from American companies, it will be hard to maintain operations in the long-term future. It should be noted that CXMT, SMIC, and YMTC has never secured U.S. export licenses for American chipmaking equipment, and are in the U.S. Department of Commerce's Entity List, which means that they are unlikely to get an export license at all. Nonetheless, they continue to operate their fabs in China.
It is noteworthy that while Micron (assembly and test operations) and TSMC (Fab 16 that can make chips on 12nm, 16nm, and 28nm process technologies) continue to operate rather sophisticated facilities in China, the U.S. government has not revoked their export license waivers.
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