The Donald Trump administration in the United States is tightening regulations that require Samsung Electronics and SK hynix to obtain individual approvals if they supply U.S. semiconductor equipment to factories in China.
According to the U.S. Federal Register on the 29th (local time), the U.S. Department of Commerce decided to abolish the blanket exemption that allowed Samsung Electronics, SK hynix, Intel, and other corporations to supply U.S.-made semiconductor manufacturing equipment to production facilities in China.
Until now, these corporations had been designated as 'verified end users' (VEU) in China, allowing them to receive U.S. equipment without separate approval. However, from now on, they will need to obtain approval from the U.S. government every time they bring equipment into their factories. This measure will take effect 120 days from the announcement date.
Previously, the Biden administration in the United States enacted equipment export bans targeting Chinese semiconductor companies in October 2022 to block China's access to semiconductor technologies, mandating that multinational corporations obtain individual approvals. However, exemptions have been applied to Samsung Electronics and SK hynix.
Concerns have arisen in the industry that this measure may dampen domestic corporations' production activities in China. Reuters reported that "the revenues of U.S. equipment companies such as KLA, Lam Research, and Applied Materials in China are likely to decline," but noted that "Chinese equipment companies and the U.S. Micron may benefit indirectly."
In response to this measure by the U.S. Department of Commerce, the Ministry of Trade, Industry and Energy of Korea released a statement saying, "We have been closely communicating with the U.S. Department of Commerce regarding the adjustment possibilities of the VEU system," and emphasized to the U.S. government that "the smooth operation of our semiconductor corporations' business sites in China is crucial for the stability of the global semiconductor supply chain."
It added, "Even if the VEU status of our corporations is revoked, we will continue to work closely with the U.S. government to minimize the impact."