U.S. Tightens Grip on Chip Exports to China, Impacting Samsung and SK Hynix

The U.S. government is escalating its restrictions on chip exports to China by revoking exemptions that previously allowed Samsung and SK Hynix to receive American semiconductor manufacturing equipment. This regulatory change will now necessitate licenses for these companies to obtain essential equipment for their operations in China.

Intel's China operations are also affected, although the company sold its Dalian unit earlier this year. The licensing overhaul is expected to reduce sales for American equipment manufacturers like KLA Corp, Lam Research, and Applied Materials, which have already seen their shares decline following the announcement.

With the revocations taking effect in 120 days, domestic Chinese equipment makers might gain competitive ground, filling the gap left by U.S. companies. This adjustment comes amid ongoing trade tensions between the U.S. and China, affecting multiple sectors, including rare earths and agricultural imports.

(With inputs from agencies.)