Fallout from U.S.-China Disputes
The ongoing U.S.-China hegemony war is threatening to shatter SK Hynix's plan to introduce extreme ultraviolet (EUV) lithography to its semiconductor plant in China.
SK Hynix recently mapped out a plan to upgrade its DRAM plant in Wuxi, Jiangsu Province by introducing EUV lithography equipment from the Netherlands, but failed due to the U.S. government's control, according to a Reuters report on Nov. 18. EUV lithography equipment is mainly used for sub-5nm production lines. SK Hynix introduced the equipment to its DRAM plant in Icheon, Gyeonggi Province this year for the first time.
The U.S. government reportedly blocked SK Hynix from bringing the equipment into China, claiming that it might help China build up its military power. Analysts say that this action was taken based on the executive orders signed by former U.S. President Donald Trump to regulate exports of strategic materials and products to China. The regulations included the National Defense Authorization Act (NDAA). In particular, this case is notable as the subject of equipment use is not a Chinese company but a third-country company that has entered China.
Industry insiders forecast that the U.S. government's decision will put considerable pressure on companies doing business in China. "If a Korean chipmaker is not allowed to upgrade its plant in China, it may have no choice but to give up the factory in the worst-case scenario," said an industry analyst.