US allows Samsung and SK Hynix to expand their chip plants in China in key concession to South Korea

The Biden administration will allow Samsung Electronics and SK Hynix to acquire the equipment they need to sustain and expand their giant chip-making operations in China, a victory for the world’s two biggest memory makers.

Washington has effectively granted the pair an indefinite waiver on broader restrictions banning the shipment of advanced chipmaking gear to China, South Korea’s presidential office said in a statement on Monday.

The US concession means Hynix and Samsung are free to import advanced American machinery that would otherwise be prohibited from entering China, but are crucial in allowing the Korean industry leaders to operate in the world’s biggest chip arena over the longer term.

“The US government’s decision means that the biggest trade issue for Korean semiconductor companies has been resolved,” presidential economic adviser Choi Sang-mok told reporters during a briefing. “Korean chip companies are key suppliers and equipment consumers, accounting for 60.5 per cent of the world’s memory output, and their stable production is directly linked to the stability of the global semiconductor supply chain.”

Hynix warned in 2022, when Washington unveiled its broadest series of chip export restrictions, that escalating curbs could force the closure or sale of a major plant in China in a worst-case scenario.