The US is proposing annual approvals for chipmaking exports to Samsung (005930.KS) and SK Hynix’s (000660.KS) China factories, aiming to avoid global supply disruptions after President Trump ended Biden-era waivers.
Bloomberg News reports:
Officials in the US Commerce Department last week presented to Korean counterparts a “site license” idea to supplant indefinite authorizations the chipmakers secured under the previous administration, according to people familiar with the matter. Those so-called validated end user, or VEU, designations are set to expire at the end of this year.
The VEU system granted Samsung and SK Hynix perpetual approval to ship estimated quantities of supplies, based on up-front security and monitoring commitments, to factories in China — where the US has broadly curbed shipments of semiconductors and the tools needed to make them. The Trump team’s proposal instead requires South Korea’s two largest companies to seek Washington’s approval for a year’s worth of restricted gear, parts and materials at a time, spelled out in exact quantities, the people said.
That introduces newfound complexity to the process, but also a way for South Korea’s top chipmakers to keep operating giant factories in China that churn out components used in everything from smartphones to data centers. US officials have said they don’t want to disrupt operations at those facilities, but also won’t approve shipments of gear that could be used to upgrade or expand them.
All told, Washington’s draft proposal left South Korean industry and government officials both relieved that a path forward exists and frustrated by the extra burden, said the people, who requested anonymity to disclose sensitive conversations.
Spokespeople for Samsung and South Korea’s Ministry of Trade, Industry and Energy declined to comment, while SK Hynix did not immediately respond. The US Commerce Department’s Bureau of Industry and Security, which oversees semiconductor export controls, also did not respond to a request for comment.
