South Koreanโ Chip Giants See Shares Dip โฃas US Tightens โฃChinaโ Export Controls
SEOUL, SOUTHโ KOREA – โขShares in South Korean semiconductor leaders Samsung adn SK Hynix fell Monday following a U.S. decision to revoke export authorizations needed for their advanced chipmaking operations in China. The move, reversing a more lenientโข approach โขunder the Biden management, โthreatens โคto complicate production at existing โขfacilities and โperhaps โbenefit competitors.
The U.S. Commerce Department’s action impacts the companies’ ability to obtain crucial U.S.machinery and equipment needed to manufacture advanced chips in China, despite both โsamsung and SK Hynix having already invested heavily in production facilities there. While the immediate impact is expected to be limited as both companies have prioritized domestic production, the restrictions raise concernsโข about long-term โoperational stability and could accelerate a shift towards alternative equipment suppliers.
According to a trade ministry official,the U.S. decision is aligned with the Trump โฃadministration’s โขpolicy of โฃreexamining export โcontrols. The moveโฃ comes amid ongoingโฃ trade tensions and โfollows recent discussions between U.S. Commerce Secretary Gina Raimondo and South Korea’s new president, Lee Jae Myung, where a joint statement wasn’t reached dueโฃ to unresolved issues surrounding South Korea’s โคU.S. investment plans tiedโ to tariff cuts.
Beyond Samsungโ and SK Hynix, shares in south Korean chip assembly โขand product suppliers also declined.Hanmi Semiconductor, a major โSKโ hynix โcustomer, tumbled 6.3%, while Hanaโฃ Micron fell 2.1%. U.S. equipment makers โฃKLA, lam research, and โApplied Materials are also anticipated to see reduced sales to โฃChina as aโฃ result of the licensing change.
Analysts suggest Samsung and SK Hynix may exploreโค expanded partnerships with Chineseโ equipment manufacturers to mitigate potential disruptions. “samsung and SKโ Hynix have planned their new production lines and processes primarily in South Korea,โ while maintaining the status quo in China,” noted Ryu Young-ho, a senior โขanalyst at NH Investment & Securities. “But,Washington’s action โcould ultimately benefit rivals like Micron,which relies less on China for its production sites.”
Theโฃ situation is further complexโค by former President Trump’s threat of a 100% tariff on all semiconductor imports, though Samsung and SK Hynix could be exempt due to planned investmentsโข and factory construction โคwithin the U.S. However, such tariffs โwould broadlyโ disrupt the global semiconductor supply chain.