U.S. Attempting to Ban Exports of Semiconductor Manufacturing Equipment to China

The Joe Biden administration is trying to keep China in check in the global semiconductor industry. The National Security Commission on Artificial Intelligence of the United States recently proposed a policy to ban exports to China of semiconductor manufacturing equipment including DUV equipment for immersion ArF lithography. Under the circumstances, South Korean semiconductor manufacturers in China, including Samsung Electronics and SK Hynix, are expressing concerns because their memory chip plants in China may be affected once the restrictions are actually implemented.

“The U.S. government needs to ban the export of such equipment in cooperation with Japan and the Netherlands in order to keep China at bay,” the commission said in its report early last month. The United States already banned the export of EUV equipment to China in the previous administration. In other words, the United States is attempting to block the export to China of a wider range of semiconductor manufacturing equipment.

At present, Samsung Electronics is manufacturing sixth-generation 3D V-NAND products in two plants in Xi’an, China. SK Hynix is producing 10-nm DRAM chips in two plants in Wuxi, China. All the four plants are using ArF lithography equipment and additional equipment will be introduced this year.

With the United States planning to tighten its restrictions, however, the additional investment of Samsung Electronics and SK Hynix is becoming increasingly uncertain. The Chinese government is currently asking Samsung Electronics to make the investment as early as possible. SK Hynix subsidiary SK Hynix System IC recently initiated its foundry business in China in partnership with Wuxi Industrial Development Group Company and its process development may be limited under the U.S. restrictions.

“The U.S. government may not approve the new equipment scheduled to be used in Xi’an and Wuxi with regard to the two superpowers’ hegemonic rivalry in the industry,” said Hanyang University professor Park Jae-keun, adding, “The South Korean government needs to step in because the issue is too big for those individual enterprises.”