US-China tech war clouds SK Hynix’s plans to upgrade memory chip plant in Wuxi
- The Wuxi factory is critical to the global industry because it makes about half of SK Hynix’s DRAM chips, which amounts to 15 per cent of the global total
- The question of the ASML machines was so concerning to SK Hynix that its CEO raised the issue with US officials during a visit to Washington in July
Plans by Korea’s SK Hynix to overhaul a huge facility in China so it can make memory chips more efficiently are in jeopardy, sources familiar with the matter told Reuters, because US officials do not want advanced equipment used in the process to enter into China.
The potential setback could make SK Hynix, one of the world’s biggest suppliers of DRAM memory chips that go into everything from smartphones to data centers, the next victim of the geopolitical struggle between the United States and China.
SK Hynix production plans call for the company to upgrade a mass production facility in Wuxi, China, with some of the latest extreme ultraviolet lithography (EUV) chipmaking machines made by Dutch firm ASML, three people with knowledge of the matter said.
The United States in the past has objected on the grounds that shipping such advanced tools to China could be used to strengthen the country’s military.
A senior White House official declined to comment specifically on the matter of whether US officials would allow SK Hynix to bring EUV tools to China. But the official told Reuters the Biden administration remains focused on preventing China from using US and allied technologies to develop state-of-the-art semiconductor manufacturing that would help China modernise its military.
The Wuxi factory is critical to the global electronics industry because it makes about half of SK Hynix’s DRAM chips, which amounts to 15 per cent of the global total. Any major changes could have an impact on global memory markets, where analyst firm IDC says demand is growing at 19 per cent in 2021 alone.