Key Facts
• August 29, U.S. government tightened regulations on semiconductor equipment exports to China.
• Samsung and SK Hynix must now apply for individual permits for each installation.
• Previous blanket approval under Verified End User (VEU) designation has been revoked.
• New rules will take effect 120 days after announcement.
• Biden administration in 2022 banned semiconductor equipment exports to Chinese manufacturers.
• Industry concerns include reduced production by Korean manufacturers in China.
• U.S. companies like KLA and Applied Materials may face revenue declines in China.
• Chinese equipment makers and U.S. firm Micron could benefit from the changes.
• South Korea’s Ministry of Trade emphasized the importance of stable semiconductor supply chains.
• South Korea plans to work closely with the U.S. to minimize impacts.
Summary
The U.S. government has revoked the Verified End User (VEU) designation for Samsung and SK Hynix, requiring them to obtain individual permits for each installation of U.S.-made semiconductor equipment in their Chinese factories. This decision, effective 120 days after its announcement, follows the Biden administration’s 2022 export restrictions aimed at curbing China’s access to advanced semiconductor technology. Industry experts predict potential revenue declines for U.S. equipment manufacturers like KLA and Applied Materials, while Chinese manufacturers and U.S.-based Micron may gain advantages. South Korea’s Ministry of Trade has expressed concerns over the impact on global semiconductor supply chains and plans to collaborate with the U.S. to mitigate disruptions.
