US Export Rules Threaten Samsung and SK Hynix China Operations
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siliconindia | Monday, 01 September 2025, 10:27 IST

- US tightens export rules, making it harder for Samsung and SK Hynix to ship critical equipment to China.
- Shares fell sharply, with Samsung down over 2% and SK Hynix over 4% in morning trading.
- China operations at risk, as the 120-day waiver expires, potentially affecting global memory chip supply.
Shares of Samsung Electronics Co. and SK Hynix Inc. fell after the Trump administration announced measures making it harder for the world’s largest memory chipmakers to ship critical equipment to their Chinese operations.
The unexpected move could affect production in China, the world’s largest semiconductor market, where both South Korean companies have significant operations. While Samsung and SK Hynix have memory plants in Korea, China contributes a major portion of their global output. In morning trading, Samsung shares fell more than 2 per cent, while SK Hynix stock dropped over 4 per cent.
Samsung and Hynix compete with Micron Technology Inc. in making key components used in electronics ranging from Apple iPhones to Nvidia AI servers. Previously, both companies operated in China under regulations allowing them to import chipmaking equipment without applying for a new license each time. The new rules set by the US mean these waivers will expire in 120 days, after which companies must apply for licenses to continue their operations.
The Trump administration’s action revises the so-called validated end user (VEU) rules, which could limit the ability to manufacture chips in China and restrict Beijing’s access to certain advanced technologies. These waivers were first granted in 2023 during the Biden administration, allowing South Korean chipmakers to import equipment necessary for maintaining and expanding their large-scale operations in China. Washington had effectively provided an indefinite waiver to broader restrictions on shipping advanced chipmaking gear to the country.
SK Hynix said in a statement that it would 'maintain close communication with both Korean and US governments and take necessary measures to minimize the impact on our business'. Samsung did not respond to a request for comment.
Jeffrey Kessler, US Under Secretary of Commerce, who oversees export control programs, said in a statement, “The Trump administration is committed to closing export control loopholes particularly those that put US companies at a competitive disadvantage. Today’s decision is an important step towards fulfilling this commitment”.
The decision comes shortly after a meeting between Trump and South Korean President Yoon Suk Yeol at the White House, where the two leaders discussed a recent agreement that set tariffs on South Korean goods at 15 per cent, avoiding a previously threatened 25 percent tariff.
Market analysts said the removal of the waiver is likely to have a small effect on the semiconductor machinery market, as non-Chinese companies spent only about $2 billion on new equipment in China in 2024, less than 2 per cent of total global industry sales. However, overseas-owned plants in China still influence the memory chip market, accounting for 10 percent of computer memory output and 15 percent of storage chips.
The new rules may pose operational challenges for Samsung and SK Hynix, and industry watchers are closely monitoring how the companies adjust to maintain production and meet global demand.
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