BEIJING, October 10 (TMTPost)— The U.S. government has effectively granted the world’s top two memory chipmakers an indefinite waiver from controls on exports to China.

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Samsung Electronics and SK Hynix will be allowed to supply U.S. chip equipment to their China factories indefinitely without separate U.S. approvals, according to a statement of South Korea’s presidential office. Once the U.S. Department of Commerce adds these South Korean companies to its validated end user list, there is no need to obtain permission for separate export cases, the statement said.

The Biden administration’s decision means the biggest trade issue for Korean semiconductor firms has been resolved, said Choi Sang-mok, senior presidential secretary for economic affairs, who noted Korean chip companies contribute 60.5% of the world’s memory output and their stable production has immediate impact on the stability of the global semiconductor supply chain. 

As of the second quarter of this year, Samsung and SK Hynix hold a total of nearly 70% of dynamic random-access memory (DRAM) global market share by revenue, and 50% of NAND flash memory market share, according to the market intelligence provider TrendForce. The pair has invested billions of dollars in China. Samsung Electronics’ its plant in Xian, the capital of northwestern China’s Shannxi province, makes about 40% of its NAND flash chips, while 40% of SK Hynix’s DRAM chips are made in its plant in Wuxi, a city in eastern China’s Jiangsu province, and 20% of its NAND flash chips made in Dalian, a coastal city in northeastern China’s Liaoning province .

Through close coordination with governments, uncertainties regarding the operation of semiconductor manufacturing lines in China have been significantly removed, Samsung said in a statement. SK Hynix welcomed the U.S. government's decision to extend a waiver with regard to the export control regulations, and believe the decision will contribute to the stabilization of the global semiconductor supply chain, a statement said.

The government and companies’ statements confirmed a South Korean report late September. The United States will soon announce that it decides to extend a waiver granted to Samsung and SK Hynix, Yonhap news agency reported on September 27. The U.S. Commerce Department has authorized the two companies to supply equipments for chipmaking in China for a year without additional license granted. The department had been discussing with these companies to designate equipment that can be brought into their Chinese production lines given their future plans, Yonhap reported.

The granted waiver doesn’t mean U.S. government is easing its curb on China. The U.S. Commerce Department last Friday placed 42 more Chinese companies to its Entity List over their support for Ruissian military. Entities listed in the Entity List are subject to license requirements for Export Administration Regulations (EAR) -controlled items typically with a presumption of denial. The Entity List’s license requirements are independent of, and in addition to, license requirements imposed elsewhere in the EAR and license exceptions are generally not available. China strongly opposes the U.S. move, which is a typical economic coercion and unilateral bullying, a spokesperson of the Commerce Ministry said last Saturday. The spokesperson urged U.S. to “immediately correct its wrongdoing and stop its unreasonable suppression of Chinese companies”, and cautioned Beijing will take all necessary measures to firmly safeguard the legitimate rights and interests of Chinese enterprises.

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