[News] U.S. Revokes China Chipmaking Tool Licenses for Samsung, SK hynix: Decoding Market Impact

Samsung and SK hynix, though temporarily spared from the risk of U.S. government stake-taking, are running into new obstacles in China as Washington revokes exemptions—granted under Biden after the 2022 export curbs—that previously allowed them to freely import American chipmaking equipment, according to Reuters and Bloomberg.

The reports suggest the revocations will kick in after 120 days, as the federal filing shows. Notably, the U.S. administration said it would approve licenses for Samsung and SK hynix to keep their existing fabs in China running, but not for capacity expansions or tech upgrades, the reports add.

Intel was also listed, though it has already exited China by selling its Dalian plant earlier this year, Reuters notes. As BLOCKS & FILES reported, the deal closed in late March, with SK hynix paying the final $2.24 billion of the $9 billion acquisition for Intel’s Dalian NAND business, while the SSD unit spun off as a separate subsidiary, Solidigm.

High China Output, Rising Risks for Korean Chipmakers

Samsung and SK hynix’s China fabs focus on general-purpose chips, not advanced products like HBM, which power AI, as noted by the Korea Economic Daily. However, the country is still a crucial product hub for both memory giants.

According to TrendForce, around 30–35% of Samsung’s total NAND output is expected to come from China in 2025. On the other hand, TrendForce projects that by 2025, about 35–40% of SK hynix’s DRAM output will come from China. For SK hynix, China plays an even bigger role in NAND production, expected to account for 40–45% of its total NAND output in 2025, as noted by TrendForce.

The Korea Economic Daily reports that Washington’s latest move could delay Samsung and SK hynix three to nine months in securing equipment for routine maintenance, as each purchase now requires U.S. approval. Thus, the delays are expected to force adjustments to production lines in China, and over the longer term, both companies may need to relocate part of their output back to South Korea, the report adds.

Winners and Losers

Reuters notes that the shift is expected to hit sales to China for U.S. equipment makers KLA, Lam Research, and Applied Materials. In the previous quarter, China accounted for roughly 30% of KLA’s revenue, 35% of Lam Research’s, and 25% of Applied Materials’, according to their earnings reports.

On the other hand, the report suggests the move could hand an edge to domestic Chinese equipment suppliers and to Micron, a U.S. rival to Samsung and SK hynix in memory. Citing Chip War author Chris Miller, Reuters also warns that unless Washington also targets Chinese memory players like YMTC and CXMT, the policy may simply open more market space for them at Korea’s expense.

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(Photo credit: SK hynix)