Korean Media: The US Does Not Allow Samsung and SK to Upgrade or Expand Their Semiconductor Factories in China!
On August 30, the Korean media "Asia Economic" published an article stating that the US government has decided to revoke the "Verified End User (VEU)" status of Samsung Electronics and SK Hynix's Chinese factories. Starting next year, each batch of equipment shipped to the two companies will require separate permission. Although this will hinder capacity expansion or technological upgrades, analysts predict that the short-term impact will be minimal, as the local factories still mainly produce older generation products.
Recently, the US Department of Commerce announced that it will cancel the general license allowing Samsung Electronics and SK Hynix to supply US semiconductor manufacturing equipment to their production facilities in China without obtaining individual licenses.
The US Department of Commerce's Bureau of Industry and Security announced that three Chinese entities, including Intel Semiconductor Co., Ltd. (located in Dalian), Samsung Semiconductor Co., Ltd., and SK Hynix Semiconductor Co., Ltd., will be excluded from the VEU list.
This measure will take effect 120 days after it is officially announced next month. Therefore, starting next January, each time the Xi'an NAND factory of Samsung Electronics, the Wuxi DRAM factory of SK Hynix, and the Dalian NAND factory import semiconductor manufacturing equipment made in the US, they will need to obtain separate licenses. The Intel Dalian factory acquired by SK Hynix will also be included in the Chinese production bases of South Korean companies.
Therefore, starting next January, the Samsung Xi'an NAND factory, the SK Hynix Wuxi DRAM factory, and the Dalian NAND factory will not be allowed to import US-made equipment without permission, and each factory will undergo a separate approval process. The US Department of Commerce stated, "While allowing the status quo to be maintained, it does not allow expansion of production or technological upgrades."
The South Korean semiconductor industry believes that this will not immediately cause operational disruptions. The process flow of the Samsung Xi'an factory and the SK Hynix Wuxi and Dalian factories lags one or two generations behind the headquarters in South Korea, and key strategic products are concentrated on production lines in South Korea and the US. Especially for the next-generation products used in AI servers, such as high-bandwidth memory (HBM), they have not yet been produced in China.
Therefore, many people assess that the direct impact of this move on the global memory supply chain is limited. An industry insider analyzed, "Considering Samsung and Hynix's global strategy and business portfolio, the actual impact is limited."
However, in the medium to long term, this may become a burden. If technological progress is blocked, the Chinese production bases may become fixed production bases for low-specification products, thereby potentially losing competitiveness. Each import of equipment requires separate licenses, which may delay approvals and disrupt supply plans. The US Department of Commerce estimates that this measure will result in an additional 1,000 export license applications per year.
Within the remaining 120 days, there is still room for negotiation between South Korea and the US to delay implementation or ease the severity of the measures. Additionally, the tolerance for the "status quo" during the actual implementation will become a key variable determining the sustainability of Samsung and SK's businesses in China.
In response to this measure, the South Korean Ministry of Trade, Industry and Energy explained, "We will actively discuss with the US government methods to alleviate the burden on enterprises to stabilize the global supply chain."
Original: www.toutiao.com/article/1841879962946572/
Statement: This article represents the views of the author.