NewKerala.com

Key Points

The US Commerce Department is revoking the special export status that allowed Samsung and SK hynix to ship certain chipmaking equipment to China without individual licenses. This move closes what officials call a "Biden-era loophole" and requires the Korean firms to obtain licenses for equipment shipments to their Chinese plants. The decision reflects escalating US-China technology competition and export control tightening. South Korea's government says it was briefed in advance and will work to minimize the impact on its chipmakers' operations.

Key Points: US Revokes Samsung SK hynix China Chip Tool Exemptions

  • US to remove validated end-user status for Samsung and SK hynix
  • Requires licenses for US chip equipment shipments to China
  • No licenses granted for capacity expansion or tech upgrades
  • Decision takes effect 120 days after September 2 publication
  • South Korea vows to minimize impact on domestic chipmakers
  • Part of broader US-China technology rivalry escalation
2 min read

US tells Samsung, SK hynix to acquire licenses for sending chipmaking tools to China

US ends Biden-era loophole requiring Samsung and SK hynix to obtain licenses for sending chipmaking equipment to their Chinese plants, effective 120 days after September 2.

"The Trump Administration is committed to closing export control loopholes - Jeffrey Kessler, Under Secretary of Commerce"

Washington, Aug 30

The US Commerce Department has announced a plan to strip South Korean tech firms Samsung Electronics and SK hynix of "validated end-user (VEU)" status, a move that will require them to secure licenses for sending certain US chipmaking equipment to their plants in China.

On the Federal Register, the department's Bureau of Industry and Security said it will revise the existing VEU authorisations list for China by removing the companies as well as Intel Semiconductor Ltd.

The department stressed its intention not to grant licenses to expand their capacity or upgrade technology at plants in China, reports Yonhap news agency.

During the previous Biden administration, Samsung Electronics and SK hynix were designated as VEUs, a status that reduces the licensing burden on the companies by allowing them to ship certain U.S. semiconductor equipment to pre-approved sites under a general authorisation instead of individual export licenses.

The decision will take effect 120 days after the official date of its publication on September 2.

In a press release, the Commerce Department said that the plan to revoke the VEU status aims to close a "Biden-era loophole."

"The Trump Administration is committed to closing export control loopholes -- particularly those that put U.S. companies at a competitive disadvantage," Under Secretary of Commerce for Industry and Security Jeffrey Kessler was quoted as saying in the release.

"Today's decision is an important step towards fulfilling this commitment."

The U.S. has been tightening its rules on exports of advanced technologies to China amid an intensifying rivalry between the two superpowers over technological leadership, maritime security and other fronts.

In response, the South Korean government said it will work to minimise the impact on domestic chipmakers.

The Ministry of Trade, Industry and Energy said in a statement that Seoul had been briefed in advance by the U.S. government on its decision to end the VEU status for Samsung and SK hynix.

"The government has been closely communicating with the U.S. Department of Commerce on possible adjustments to the VEU system, stressing the importance of smooth operations of our chipmakers' Chinese facilities for global semiconductor supply chain stability," the ministry said. "Even if VEU status is withdrawn, we will continue to work with the U.S. to ensure any impact on Korean companies is minimised.”

—IANS

- IANS

Share this article:

Reader Comments

P
Priya S
The US-China tech war is affecting everyone now. Maybe this is an opportunity for India to boost our own semiconductor manufacturing under PLI scheme. Make in India should be our focus!
A
Aditya G
While I understand national security concerns, these restrictions feel like economic bullying. Developing countries like India get caught in the middle of superpower conflicts. Not fair to global trade.
S
Sarah B
Interesting how this is being called "closing a Biden-era loophole." The policy flip-flop between US administrations creates so much uncertainty for international businesses. Stability matters!
V
Vikram M
This will definitely increase smartphone and electronics prices in India. Samsung is a major player here. Hope the 120-day transition period helps minimize disruption. 🤞
K
Karthik V
Time for India to become self-reliant in semiconductors. We can't keep depending on other countries' geopolitical decisions. Atmanirbhar Bharat is the need of the hour!

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50