US Limits Chip Equipment Imports: Samsung and SK Hynix Feel the Pressure

The US-China trade war is affecting the chip industry again. This time, Samsung and SK Hynix are the latest casualties. New US rules could make their operations in China harder. Their factories will stay open. But they cannot bring in new US-made chipmaking tools.

The US Commerce Department said it will cancel the licenses that let them import equipment. The change starts in 120 days. Without these tools, they cannot upgrade machines or expand production.

Samsung’s NAND plant in Xi’an is hit hard. It makes about 40 percent of Samsung’s global NAND output. SK Hynix also relies on its Chinese factories for DRAM. Both companies make older chips in China. Advanced chips stay in South Korea and the US.

The US says this is a national security measure. They want to slow China’s chip progress. They also want to keep advanced tools from military use. For Samsung and SK Hynix, it creates uncertainty. Broken machines cannot be replaced easily. New imports need special approval, which is not guaranteed.

These rules build on controls from 2022. Temporary waivers were used then to protect supply chains. Those waivers are gone. Chinese equipment makers could gain ground. US rivals like Micron may also benefit.

Both companies employ over 20,000 people in China. South Korea is talking with the US to reduce the impact. The goal is clear. The US wants advanced chip production out of China. For Samsung, the timing is tough. They are launching the Galaxy Tab S11 while their semiconductor division faces new challenges. The company is also gearing up to launch its new Exynos chip, the Exynos 2600. It might be the world's first 2nm SoC.

Of course, this is still subject to change or some sort of relief in the future. The US and China are still in negotiations.