Key Points

On Friday (US time), the U.S. Commerce Department announced a plan to strip the two Korean chipmakers, as well as Intel Semiconductor Ltd., of "validated end-user (VEU)" status, a move that will require them to secure individual export licenses for sending certain U.S. chipmaking equipment to their plants in China.

Until now, Samsung Electronics and SK hynix could ship certain U.S. semiconductor equipment to pre-approved sites under a general authorization with their VEU status, reports Yonhap news agency.

"We have been able to reduce business uncertainties even amid Washington's export controls on China thanks to the VEU status, but with the planned revocation of the status, we will have to face short-term damage," an industry official said on condition of anonymity.

"The U.S. administration has been rolling out new or revised semiconductor regulations every two to three weeks and also revising existing ones," the official said.

"But since Washington has a clear direction of fostering the American semiconductor industry, we are reviewing various scenarios and working on mid- to long-term countermeasures," the official added.

The Korean chipmaking industry has been facing headwinds amid U.S. controls on tech exports to China, sparked by intensifying rivalry between the two countries over technological leadership and security issues.

In April, the administration of U.S. President Donald Trump expanded its export ban to cover the H20 graphic processing unit developed by artificial intelligence (AI) chip giant Nvidia specifically for China, though it changed its stance earlier this month to grant export licenses for the product.

Also this month, Trump has said his administration will soon unveil tariffs of around 100 percent on semiconductor imports, raising concerns for Korean companies.

na/

- IANS