Bloomberg: US Plans to Require Samsung and SK Hynix to Implement Annual Approval for Chip Supplies to China
Bloomberg reported on Monday, September 8, citing informed sources that the United States plans to implement an annual approval system for the factories of Samsung Electronics (Samsung Electronics) and SK Hynix in China, replacing previous indefinite export licenses.
Reuters cited Bloomberg reports that U.S. Commerce Department officials proposed a "site license" (site license) scheme to Korean authorities last week, replacing the long-term authorization obtained by Samsung and SK Hynix under the previous administration. These so-called "Verification of End User" (VEU) qualifications will expire at the end of this year. The VEU system previously allowed the two companies to export specific quantities of semiconductor equipment and materials to their Chinese factories based on prior security and regulatory commitments.
The new proposal from the Trump administration requires Samsung and SK Hynix to reapply for U.S. approval each year for specific quantities of restricted equipment. This move increases the approval process but is said to ensure continuity of business operations. The report noted that discussions are still ongoing and no final decision has been made yet.
Bloomberg stated that this plan has triggered complex reactions in South Korea: the industry and government officials feel relieved that the framework can continue, but they also expressed dissatisfaction with the additional administrative burden.
The report also mentioned that shortly after South Korean President Yoon Suk-yeol and U.S. President Trump signed a defense and investment agreement and pledged to promote a more balanced U.S.-China relationship, the U.S. revoked the previous VEU exemption. Additionally, U.S. immigration enforcement actions targeting South Korean companies' investment projects in the U.S. have added tension to bilateral relations.
Since 2022, regardless of whether it was under Biden or Trump, the United States has continuously expanded export controls on China, aiming to curb China's capabilities in semiconductors and artificial intelligence. The Biden administration had granted exemptions to Samsung, SK Hynix, and TSMC to alleviate the impact on allied companies operating in China.
Original: www.toutiao.com/article/1842771752442187/
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