South Korea’s SK Hynix Gets China Green Light from the U.S.

As the United States tries to prevent unintended consequences of its semiconductor export curbs on China, South Korean memory chipmaker said it got authorization from the U.S. to receive goods for its China production sites without additional licenses imposed by the new rules, hours before a new restriction took effect. The Biden Administration planned to exempt foreign chipmakers such as SK Hynix and Samsung from its new restrictions, but the rules imposed on Friday did not exempt such companies.

The rules require licenses in order for firms to ship U.S. exports to facilities with advanced chip production in China as part of a U.S. bid to slow China’s technological and military advances.

As of midnight Tuesday, exporters also cannot support, service and send non-U.S. supplies to the China-based factories without licenses if U.S. companies or people are involved.

As a result of these export restrictions, even basic items like light bulbs, springs, and bolts that keep tools running may not have been able to be shipped until vendors are granted licenses. And without the minute-by-minute support the foundries need, they could begin shutting down.

“Our discussions with the Department of Commerce led to an approval to supply equipment and items needed for development and production of DRAM semiconductors in Chinese facilities without additional licensing requirements,” SK Hynix said in a statement.

The company added that the authorization, which would help avoid disruptions to the supply chain, is for a year. The temporary solution is believed to be put into action until a longer term solution could be found. It is said at least one other non-Chinese firm received a similar authorization.

If the authorization was not received, a variety of equipment and other suppliers would have had to pull their personnel from the fabs in China.

The U.S. planned to review licenses for non-Chinese factories in China hit by the new restrictions on a case-by-case basis, but even if approved that could create delays in shipments. Licenses for Chinese chip factories were likely to be denied.

Other major chipmakers operating in China include TSMC and Intel.

The Chinese chip facilities are not expected to get any reprieve.

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