Tech war: US waiver of China export restrictions on advanced semiconductor equipment to South Korea’s Samsung and Hynix to make life harder for rival mainland chip makers

The US waiver is expected to be a big boon for both Samsung and Hynix in the world’s largest semiconductor market

Washington’s action, however, puts rival Chinese memory chip makers like YMTC at a disadvantage in their home market

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In a major concession to Seoul, Washington has granted both Samsung Electronics and SK Hynix an indefinite waiver on broad restrictions to export advanced chip-making equipment to mainland China. Photo: Shutterstock

Ann Caoin ShanghaiandTracy Quin Shanghai

Published: 7:00am, 11 Oct 2023

The US government’s recent decision allowing South Korea’s Samsung Electronics and SK Hynix to buy advanced manufacturing equipment for their semiconductor plants in mainland China is expected to make life more difficult for rival domestic memory chip makers like Yangtze Memory Technologies Co (YMTC), according to analysts.

In a major concession to Seoul, Washington has granted both Samsung and Hynix an indefinite waiver on broad restrictions to export advanced chip-making equipment to the mainland, which currently accounts for about a third of the global NAND Flash memory and DRAM market.

That action will serve as a big boon for the two companies in the world’s largest semiconductor market, according to Liang Zhenpeng of research institute Kandong. “It will stabilise their market share and maintain their competitive advantage in [China’s semiconductor] supply chain,” Liang said.

The waiver is also expected to benefit suppliers of advanced chip-making equipment and materials, while putting rival Chinese memory chip makers like US-blacklisted YMTC at a disadvantage, according to analyst Wang Lifu of semiconductor consultancy ICWise. “Had the US not granted a waiver [to the two South Korean firms], YMTC would have benefited [from demand in the local market],” Wang said.