U.S. Revokes Chip Giants' Access: Impact on Samsung and SK Hynix

In a significant policy shift, the U.S. government has revoked authorisations for SK Hynix and Samsung Electronics to acquire U.S. semiconductor manufacturing equipment for their operations in China. This move, which comes as part of broader restrictions on chip-related exports to China, impacted the stocks of the two leading South Korean firms on Monday.

SK Hynix and Samsung, key players in the global memory chip market, together control approximately 70% of the DRAM market and 54% of the NAND market. However, the latest U.S. decision could lead to significant constraints, especially for SK Hynix, which derives a substantial portion of its production from China. Despite this, some analysts anticipate that the initial repercussions might be limited.

Ryu Young-ho, a senior analyst at NH Investment & Securities, noted that while Samsung and SK Hynix have substantial operations in China, their strategic focus on domestic expansion might buffer them against immediate impacts. Meanwhile, the U.S. move could inadvertently bolster competitors like Micron. As a countermeasure, SK Hynix intends to maintain open channels with both Korean and U.S. authorities to alleviate potential impacts on its business.

(With inputs from agencies.)