In a significant policy shift, the United States government has granted annual export licences to South Korean tech giants Samsung Electronics and SK Hynix. These approvals allow the companies to continue shipping advanced semiconductor manufacturing equipment to their production facilities in China throughout the year 2026.
From Waiver to Annual Scrutiny: A Stricter Framework
This decision, reported by Reuters citing informed sources, arrived just as a long-standing and more permissive waiver system was set to expire. The previous arrangement, known as validated end-user status, allowed factories owned by Samsung, SK Hynix, and Taiwan's TSMC in China to receive US-controlled chipmaking tools without needing separate licences for every shipment.
Under the new, more restrictive framework, that blanket permission is gone. The US has formally moved to a system of annual approvals for exporting chipmaking tools into China. Each calendar year, companies must now seek renewal for these licences, subjecting their operations to yearly scrutiny by Washington.
Critical for Global Memory Chip Supply
These approvals are vital for the global electronics supply chain. Samsung and SK Hynix manufacture a substantial portion of the world's memory chips within China. Samsung operates a major NAND flash memory plant in Xi'an, while SK Hynix has a DRAM chip factory in Wuxi and a NAND chip facility in Dalian.
With soaring demand for memory chips from AI data centres driving up prices, maintaining smooth operations at these Chinese fabs is more crucial than ever. The new licences permit the companies to keep these factories running and perform essential equipment maintenance. However, they do not allow for expansion or upgrades to the latest, most advanced manufacturing technology.
Implications: Uncertainty and Economic Impact
The shift to annual licences introduces a layer of uncertainty for the chipmakers. Each year, the US can alter the terms or even deny approval based on geopolitical tensions and national security assessments. This creates long-term planning challenges for billion-dollar manufacturing operations.
Furthermore, the stricter regime is expected to impact sales for leading American semiconductor equipment manufacturers. Companies like Applied Materials, Lam Research, and KLA, which supply essential machines to these memory factories, may face reduced revenue from the Chinese market.
US officials have been clear about their intent to prevent China from acquiring advanced chipmaking capabilities. Even before this policy change, the export of the most sophisticated equipment, such as Extreme Ultraviolet (EUV) lithography machines, was already prohibited.
For now, the 2026 licence provides a temporary reprieve, ensuring the continuity of a significant segment of global memory chip production. But the message from Washington is unambiguous: shipments of US-origin chipmaking gear to China will now be watched much more closely, reviewed on a year-by-year basis.
