The U.S. Commerce Department has withdrawn earlier approvals that permitted Samsung, SK Hynix, and other international chipmakers to import American semiconductor manufacturing equipment to their factories in China, according to a report by Reuters.
Reports indicate that the Commerce Department has removed Samsung and SK Hynix from its ‘validated end-user’ list—a designation that previously spared them from undergoing lengthy, individual licensing procedures.
The decision represents a significant shift in the U.S.’s approach to export controls. Since October 2022, the U.S. has implemented broad restrictions aimed at limiting China’s semiconductor advancements. Although Samsung and SK Hynix had previously benefited from temporary exemptions under the Validated End-User (VEU) program, the removal highlights Washington’s renewed commitment to restricting China’s access to cutting-edge technology. As a result, the companies will now be required to obtain export licenses for relevant shipments, with the change taking effect in 120 days.
As per the report, the department stated it will continue to approve licenses necessary for maintaining existing semiconductor facilities in China, but it does not plan to authorize expansions or upgrades to more advanced production technologies.
South Korean officials cautioned that the move could disrupt the global semiconductor supply chain and stated Seoul would urge Washington to reduce any negative consequences. SK Hynix declared it would collaborate closely with both South Korean and U.S. authorities and take appropriate measures to mitigate the impact on its operations. Meanwhile, China’s Ministry of Commerce condemned the decision and pledged to take action to safeguard the lawful rights of Chinese companies.
Industry experts caution that the updated regulations may hinder the timely acquisition of equipment and impede technological advancements at South Korean-owned semiconductor facilities in China. While these facilities produce chips that are one or two generations behind South Korea’s most advanced fabs, they are still vital to the global supply chain. Samsung’s Xi’an plants contribute around 35% of worldwide NAND flash production, and SK Hynix’s Wuxi facility is responsible for roughly 40% of its DRAM output.
The withdrawal of exemptions stems from broad export restrictions enacted in 2022, which curbed U.S. sales of advanced semiconductor manufacturing equipment to China.
The U.S. Bureau of Industry and Security projected that the policy shift could result in over 1,000 additional export license applications each year, placing added pressure on both the affected companies and regulatory agencies.
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