Foreign Chipmakers Producing in China to be Excluded from U.S. Export Curbs

The Biden administration plans to exclude foreign chipmakers, including South Korea’s SK Hynix and Samsung, operating in China from its planned export curbs aimed at hampering Beijing’s technological ambitions. The Commerce Department will likely deny requests from U.S. firms to send equipment to Chinese semiconductor manufacturers like Yangtze Memory Technologies (YMTC) and ChangXin Memory Technologies if they are making advanced DRAM or flash memory chips. However, license requests to sell equipment to foreign companies manufacturing advanced memory chips in China will be reviewed on a case by case basis,  potentially allowing for them to receive the equipment.

South Korean chipmakers have been worried that the Biden administration’s move could hit their China-based manufacturing business. The news could ease some of their fears. However, they are still concerned that the case-by-case review standard is still far from a certain green light for U.S. equipment to be shipped to their Chinese facilities and could cause lengthy debates with regulators over what shipments to approve.

The new export curbs are targeted at China-based producers of DRAM chips, which hold information from applications while the system is in use, and NAND chips, which are used for data and file storage.

U.S. suppliers seeking to ship equipment to China-based semiconductor firms would not have to seek a license from the Commerce Department if selling to firms producing DRAM chips above the 18 nanometer node, NAND Flash chips below 128 layers, or logic chips above 14 nanometers.

However, U.S. companies selling sophisticated technology to indigenous Chinese chipmakers producing DRAM chips at 18 nanometers or below, NAND flash chips at or above 128 layers or logic chips at or under 14 nanometers would have to apply for a license that would be reviewed with the tough “presumption of denial” standard.

The rules, if implemented as expected, would be the first export curb to target Chinese memory chip production without military applications, meaning a more expansive view of U.S. national security.

The measures would also hit YMTC, a rising power in manufacturing NAND chips founded in 2016. Its growth and low prices represent a “threat” to U.S. based Micron and Western Digital, according to a June 2021 White House report.

YMTC is already under investigation by the Commerce Department over whether it violated U.S. export controls by selling chips to Chinese telecoms company Huawei. Its chips are being evaluated by Apple for inclusion in some of its iPhones in China, a major concern for U.S. lawmakers and the Biden administration.

LAM Research Corp, Applied Materials Inc and KLA Corp, major U.S. vendors of equipment to make chips, are likely to be hit by the restrictions.

South Korea’s Samsung has a facility producing NAND Flash memory chips in China’s Shaanxi Province. South Korean rival SK Hynix has purchased Intel Corp’s NAND flash memory chip manufacturing business in Dalian and produces DRAM chips at another China-based facility.

25% of SK Hynix’s and 38% of Samsung’s NAND wafer production is based in China, and about 50% of SK Hynix’s DRAM production is in China.

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now


Do you need to access special insights on this matter?

Start your 7-day free trial  and become a member today


Subscribe to Top Insights Today

Subscribe to Executive Newsletter Top Insights Today

The Executive Newsletter -Top Insights Today- puts global business events in perspective through special insights

Join the ranks of global executives and subscribe to Top Insights Today

Top Insights Today covers insights on energy, clean-tech, oil&gas, mining, rare earths, defense, aviation, infrastructure, manufacturing, electrical vehicles, big-tech, finance and politics of business

By clicking subscribe you agree to our privacy and cookie policy and terms and conditions of use.

Read more insights

Mexico Looking for U.S., Canada Partnership in State-Owned Lithium Business

Mexican President Lopez Obrador said his government will look for participation from U.S. and Canadian companies in the country’s nascent lithium business, which was nationalized in April. Although Mexico has not yet produced lithium commercially, close to a dozen foreign companies hold contracts to explore potential deposits. 

Australia Eyes More Renewable Energy Exports to Europe

Australia aims to help Europe ease its energy crisis by exporting more renewable energy to the continent. Europe has been scrambling to ramp up its renewable energy resources amid an energy crisis to phase out Russian fossil fuel imports. European nations have also been trying to cut energy consumption and fill their gas storage levels ahead of the winter season and to prepare for any further cutoff of Russian supplies.

IEA Urges the EU to Take Measures for Next Winter

The International Energy Agency (IEA) has warned the European Union on Monday that a gas shortage is possible next winter if Russia cuts gas supplies further. The agency has also urged the governments to act faster to conserve energy and expand renewable energy development. Europe has so far avoided an energy crunch for this winter thanks to full gas storage tanks, and milder than expected weather.

Stay informed

error: This content is protected !!