The Trump administration is floating a plan that would force Samsung Electronics (KS:005930) and SK Hynix (KS:000660) to seek annual approvals from Washington for shipments of chipmaking gear to their factories in China, Bloomberg reported on Monday.
The proposal would replace the indefinite waivers granted under the Biden administration, which the Trump team has now revoked.
The Commerce Department last week presented South Korean officials with the idea of “site licenses” that would spell out in detail a year’s worth of parts, materials, and restricted equipment allowed into Chinese plants.
The change adds complexity for companies that have long relied on so-called validated end user designations, which provided perpetual approval so long as firms met upfront security and monitoring obligations. Those waivers are set to expire at the end of 2025, the report said.
Samsung and SK Hynix operate massive Chinese fabs that turn out memory chips critical to global supply chains, powering everything from smartphones to servers.
U.S. officials have insisted they do not intend to halt production at those facilities, but said they will not permit shipments of advanced tools that could be used to expand or upgrade them.
“The real question is how to reassure them on that point,” one South Korean trade official reportedly told Bloomberg.
The draft plan offers more predictability than requiring companies to apply for each shipment individually — an alternative Washington acknowledged could otherwise mean processing an additional 1,000 permits a year.
Still, chipmakers worry about the practicalities. Predicting the exact mix of spare parts and tools needed over twelve months is difficult, raising the risk of delays if equipment not listed in the license breaks down, the report said.
A U.S. official said the government has a system in place to issue licenses quickly when needed, Bloomberg noted.
The shift underscores South Korea’s strategic bind. The country depends on Washington as its key security ally while China remains its largest trading partner. The U.S. decision to revoke Biden-era waivers came just days after President Lee Jae Myung signed a defense and investment deal with President Donald Trump.
Tensions deepened further when U.S. immigration officers raided a Georgia battery venture run by LG Energy Solution and Hyundai Motor.
Washington has pursued sweeping export controls on semiconductors and chipmaking tools since 2022 in a bid to constrain China’s technological ambitions in advanced chips and artificial intelligence.
Biden-era waivers for Samsung, SK Hynix and TSMC (TW:2330) were designed to prevent major disruptions to global electronics supply. Former South Korean president Yoon Suk Yeol hailed those waivers as resolving a major trade issue for the country’s chipmakers.
Trump officials have dismissed the VEU framework as a “Biden-era loophole” and signaled they will not restore it.
For South Korea, the report said, "Washington’s latest offer may be the best outcome Seoul could hope for."
Source :
https://www.investing.com/news/stock-market-news/us-eyes-annual-approvals-on-samsung-sk-hynix-chip-supply-shipments-to-china-bbg-4228207
