Korea hopes US will extend sanction exemptions for SK hynix and Samsung

Stuck in the middle or not, supply chains – and the Korean economy – must carry on

South Korean chipmakers believe they are likely to receive a waiver on US semiconductor tool related sanctions for an undisclosed period, according to the country's industry minister Lee Chang-yang.

Those bans specifically restrict the export to China of equipment and software used to produce DRAM chips below 18nm, NAND silicon over 128 layers, or logic processors below 14nm.

A one year exemption given by the US Department of Commerce to SK hynix and Samsung is currently in place, but set to expire in October.

"We've told the US side that our companies should be able to maintain their current operations in China as long as their business activities do not disrupt global semiconductor supply chains," reportedly said Lee, adding that Korea will continue consultations with Washington on the matter.

SK hynix and Samsung are the world's two top memory makers. In October of last year, 25 percent of SK hynix's, and 38 percent of Samsung's, NAND wafer production was reportedly produced in China, along with 50 percent of SK hynix's DRAMs.

According to market research firm TrendForce, SK hynix plans on shifting capacity expansion to Korea in the long term while leaving its Wuxi manufacturing site to focus on legacy DRAM and demand from China.

Both SK hynix and Samsung reported hefty losses for Q1 – citing an uncertain macroeconomic environment, inventory surplus, and weakened customer spending. Matters for the two manufacturers – which represent a significant chunk of the Korean economy – are not helped by the continual degradation of US-Sino relations and resultant trade sanction requirements.

Both the US and South Korea benefit from the relationship, but continued pressure on American allies to join in a united front against China has increasingly placed countries like Korea in an awkward position.

Samsung has significant investments in the US – including a $17 billion-plus factory in Taylor, Texas, partially funded by CHIPS funds. But access to the subsidies requires compliance with caps on production in China and the submission of a host of information that South Korean minister Ahn Duk-geun has deemed "too much."

"During my talks with the US commerce secretary, we've said that its guidelines need to be universal, general and transparent so as not to discriminate against any foreign companies," Lee said on Tuesday. "We will actively collect opinions from business circles and continue discussions with the US to maximize our benefits." ®

More about

TIP US OFF

Send us news


Other stories you might like