Possible Exceptions
The U.S. government, which has restricted the export of advanced semiconductor production equipment to China, is reportedly considering applying relaxed standards only to South Korean companies running factories in China.
The U.S. Department of Commerce is in talks with the South Korean government to apply separate standards for South Korean companies in China to increase predictability while maintaining its stance of controlling the export of semiconductor equipment to China, according to industry and government sources on May 10. The options include excluding only equipment above a certain specification from being exported to China and placing a cap on the level of semiconductors that can be produced by Korean chipmakers in China.
Samsung Electronics is running a NAND flash plant in Xian and a back-end processing plant in Suzhou in China. SK hynix is operating a DRAM plant in Wuxi and a NAND flash production facility in Dalian, China. These companies are operating them under a temporary one-year moratorium on U.S. export controls.
A more fundamental solution to the situation is expected to make it easier for Korean semiconductor companies to do business in China. “We are in close consultation with the United States but I can’t confirm anything,” said an official of the Korean Ministry of Trade, Industry and Energy. “Basically, we asked for a way to resolve uncertainties so that Korean companies’ operations in China are not disrupted, and U.S. authorities are fully aware of what we want.”
During President Yoon’s state visit to the United States last month, Korean Industry Minister Lee Chang-yang and U.S. Commerce Secretary Gina Raimondo issued a joint declaration to maintain the semiconductor industry’s sustainability and technology upgrades and minimize disruptions to the global semiconductor supply chain with respect to U.S. control on exports to China. At the time, Samsung Electronics was also reportedly in separate contact with the U.S. Department of Commerce to discuss related matters.