Samsung, SK hynix, and Intel reportedly won't be allowed to expand their operations in Chinese production facilities, as the Trump administration imposes a new hurdle.
Major South Korean Memory Manufacturers Won't Be Able To Procure US Equipment For Their Chinese Fabs
It seems that President Trump has been more 'skeptical' about the operations of US entities in China, and the administration does not want to give Beijing any advantage. In a report by Bloomberg, it is disclosed that firms like Samsung, SK hynix, and Intel won't be allowed to ship new US-made equipment to Chinese facilities, as the Commerce Department is now revoking waivers that were previously issued under the Biden administration. Previously, these firms were allowed to ship equipment without the need of getting a license each time.
The companies mentioned reportedly have a 120-day deadline before the waivers expire, and by then, they need to devise an alternative route. The relaxation under the Biden era specifically targeted South Korean manufacturers since they have massive production lines in China responsible for DRAM and NAND products. According to a report by Bernstein, memory chip supply is expected to see a significant influence following this decision since China's facilities account for '10% of computer memory output and 15% of storage chips'.
The Trump administration is committed to closing export control loopholes — particularly those that put US companies at a competitive disadvantage. Today’s decision is an important step towards fulfilling this commitment.
-Under Secretary of Commerce Jeffrey Kessler
Given that the US administration doesn't grant some form of relaxation, both Samsung and SK Hynix could struggle to maintain their Chinese facilities, giving them the option of relocation or downgrading to older-generation production. The decision also comes at a point when the US and South Korean trade delegations are engaging in tariff negotiations, and given that the waiver was focused initially on South Korean memory manufacturers, it seems like the move is targeted to provide the Trump administration with leverage in trade talks.
It would be interesting to see whether such moves compromise the US-China trade talks by any means, since they create hostilities, which could prove to be a barrier in the negotiations moving forward.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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