Yahoo Finance Seoul Sees US Extending China Export Waivers for its Chipmakers
(Bloomberg) -- South Korea expects Washington to extend a waiver on the shipment of advanced chipmaking equipment to China, allowing SK Hynix Inc. and Samsung Electronics Co. to get the gear they need to maintain operations in the world’s second-biggest economy.
Most Read from Bloomberg
Turkey Latest: Erdogan Vote Below 50% Needed to Win Election
Early Vote Count Shows Erdogan Below 50% in Turkish Election
Trump Changed GOP Rules to Make Winning the Nomination Even Easier — for Trump
A one-year waiver due to expire this October is expected to be extended “for a considerable period of time,” Korean trade minister Lee Chang-yang said on Tuesday. Such a move will clear up a major uncertainty for Korean chipmakers concerned about the future of their biggest overseas manufacturing bases.
Samsung and Hynix are the world’s largest memory chipmakers, essential for most devices from computers to smartphones and cars. Korean officials have told their US counterparts that the Asian country’s companies should be allowed to maintain operations in China to avoid disrupting the global chip supply chain, Lee told reporters at a briefing.
Washington last year imposed a series of trade curbs on China that limited its access to advanced technology, including semiconductor manufacture and chipmaking machinery. It granted a one-year waiver on those sanctions to Korean memory makers including Samsung and Hynix, which is estimated to produce a third to half of its memory chips from China.
Hynix has said it’s considering various options for its operations in China but isn’t expecting significant changes for now. The Korean chipmaker said in April it was positive on receiving an extension of the waiver.
Read more: Hynix Warns US Chip Curbs Could Shut Giant China Plant
The US effort was aimed at capping China’s development of advanced technology ranging from artificial intelligence to spaceships and fighter jets. Aside from export curbs, the Biden administration also imposed restrictions on prospective China investments for any chipmakers hoping to receive federal funds through its Chips and Science Act. Samsung is among those companies as it’s building a Texas chip plant that may benefit from US subsidies.
South Korea and the US are security and trade partners, and they’ve beefed up discussions through working groups designed to safeguard the interests of big businesses like Samsung and Hynix. Samsung Executive Chairman Jay Y. Lee was among the business leaders who joined Korean President Yoon Suk Yeol on a visit to the US last month.
US officials and Korea’s presidential delegation had “extensive conversations,” Commerce Secretary Gina Raimondo said during a Senate Appropriations Committee hearing last month. She underscored the importance of coordination between the US and its allies to boost chip production.
Read more: Korea Set to Extend Memory Chip Dominance as US Squeezes China
Most Read from Bloomberg Businessweek
The Plot to Steal the Other Secret Inside a Can of Coca-Cola
How Normalizing Menopause Can Help Employers Retain Senior Women
AI Drug Discovery Is a $50 Billion Opportunity for Big Pharma
©2023 Bloomberg L.P.
