U.S. Revokes Chip Equipment Licenses, Impacting South Korean Giants
Shares in SK Hynix and Samsung Electronics fell following the U.S. revocation of licenses enabling them to obtain American semiconductor manufacturing equipment for their Chinese plants. This move challenges their ability to upgrade facilities in China, potentially affecting global competitiveness and aligning with U.S. export control policies.
Shares of leading South Korean chipmakers SK Hynix and Samsung Electronics saw a decline on Monday after the United States withdrew authorizations that allowed them to secure vital semiconductor manufacturing equipment for their Chinese facilities. The revocation complicates efforts by these firms to enhance their Chinese operations, posing a potential threat to their global market standing.
Previously benefiting from exemptions amid broader U.S. export restrictions on chip-related products to China, SK Hynix and Samsung now face a significant policy shift. The ruling is expected to take hold in 120 days, with SK Hynix's shares dropping by 4.8% due to its substantial DRAM and NAND production in China. Although Samsung's decline was milder at 3%, the company is still facing increased uncertainty with around one-third of its NAND chips made in China.
The decision aligns with long-standing U.S. strategies under former President Donald Trump, aimed at scrutinizing export controls perceived as overly lenient under Biden's regime. As SK Hynix commits to close governmental dialogue to mitigate impacts, analysts note the potential advantage for rivals like Micron, which depend less on Chinese production. Meanwhile, U.S. tariffs on semiconductors loom, impacting the complex global supply chain.
(With inputs from agencies.)
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