SK Hynix Chief Replies To Reports Of Sending EUV Chip Machines To China

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Korean memory manufacturer SK Hynix's chief executive officer (CEO) Mr. Lee Seok-hee outlined that his company will "wisely" navigate the ongoing tensions between the United States and China when it comes to installing cutting edge chip manufacturing equipment in its Chinese facilities. SK Hynix, which is one of the world's largest memory module manufacturers, is currently upgrading its plants with machines that are capable of using extreme ultraviolet light to print semiconductors. These machines are regulated by the U.S. government who has prevented their manufacturer from shipping them to China due to fears that they might e used to build products for the Chinese military.

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Mr. Lee's comments were made at the sidelines of Semiconductor Day, where he responded to questions from reporters about the ongoing controversy between reports of U.S. concerns about SK Hynix upgrading its memory manufacturing facilities in China. In the computing industry, memory modules work alongside central processing units (CPUs) for processing data and storing information not instantaneously required by a CPU.

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Controversy related to the Chinese plant was reported by Reuters last week, who outlined that SK Hynix's plans to overhaul its memory manufacturing facility in Wuxi, China were at the risk of jeopardy since American officials do not want extreme ultraviolet (EUV) machines shipped to the country. A White House official, while declining to comment on whether the U.S. would allow the Korean company to ship the machines to China, maintained that the country remains committed to preventing China from gaining access to the tools.

As reported by Yonhap, SK Hynix's CEO outlined to reporters that:

"The fourth-generation DRAM chips have been produced in South Korea since July and it is still a long way to go before we can apply the same technology in our Chinese plant. We will respond to the matter wisely while cooperating with interested parties."

The memory modules referred to by the executive are manufactured on the 10-nanometer semiconductor node using EUV machines. These machines are manufactured by the Dutch company ASML, which is the only company in the world capable of manufacturing them. They also use U.S.-origin technologies, which gives the country the ability to prevent them from being used by actors acting against American national security.

Mr. Lee's comments came after an SK Hynix spokesperson outlined last week that the company would "flexibly" operate its Chinese chip plant. Concurring with the executive, Roh Geun-chang, head of technology research at HMC Investment & Securities, told Yonhap that:

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"The adoption of the advanced ASML technologies was still a few years away for SK hynix's Chinese operation. I think there are still ways to solve the issue in a diplomatic manner because SK hynix is not a Chinese company."

The company's Chinese plant is located in the Eastern Jiangsu province's Wuxi city. It is responsible for half of SK Hynix's DRAM (Dynamic read-write Random Access Memory) modules, which represent 15% of the total global output.

SK Hynix also announced last year that it would acquire U.S. chip giant Intel Corporation's NAND memory and storage business for $9 billion. The deal, which will see SK become the world's second-largest memory manufacturer after Korean chaebol Samsung, is currently waiting for Chinese regulatory approval, after having secured the go-ahead in other regions. The deal is expected to be finalized by 2025. It will enable the Korean company to gain a foothold in the enterprise NAND segment, at a time when enterprise spending for data center computing products is growing.

The author has no position in any of the stocks mentioned. WCCF TECH INC has a disclosure and ethics policy.
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