Korean chipmakers given 1-year grace period on US chip export curb on China

South Korean chipmakers will be given a one-year grace period that would allow for their China-based chip plants to continue to import critical chipmaking tools from the United States, without the licensing requirements announced the previous week by the Joe Biden administration.

Memory chip maker SK hynix revealed that the US Department of Commerce’s Bureau of Industry and Security has assured SK hynix that the company, its suppliers and business partners are still authorized to engage in chipmaking activities for one year without a license.

“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,” the company said in a statement.

The same waiver will be applied to Samsung Electronics, SK hynix's hometown chipmaking rival, which also runs a chip fabrication plant in China, according to industry sources. Samsung Electronics declined to comment on the matter.

The Yoon Suk-yeol administration on the same day noted that Korean chipmakers would be immune to the new US export curbs that restrict procurement of machines for advanced chipmaking technology, and that chipmaking powerhouses like Samsung Electronics and SK hynix would comply with US authorities to meet the licensing requirements.

The Industry Ministry refuted a media report that US chip equipment maker KLA had decided to cease supplies to chip fabrication plants based in China -- where 30 percent of its annual revenue comes from. The report indicated that non-Chinese companies like SK hynix and Intel had also been dragged into the mix.

The government claimed in a release that the KLA's legal statement was merely a "compliance reminder" to clients including SK hynix, adding that the letter does not allude to KLA's immediate action.

"There is no change in the situation," read the release from the government.

On Friday, the US imposed sweeping chip-related export curbs on China, which also affect international companies running factories in China.

Under the new rules, non-Chinese chipmakers will be required to get a license for the export of items including manufacturing equipment and support for DRAM chips made in an 18-nanometer process and below, NAND chips with 128 layers or more advanced and logic chips of a 14-nanometer process and below. The license will be granted on a case-by-case basis after review by US authorities.

"Along with the Korean government, we will continue our consultations with the Department of Commerce and make our utmost efforts to operate our plants in China in a stable way, while continuing compliance with applicable laws and regulations,” SK hynix said.

The Chinese operations of SK hynix include a DRAM manufacturing facility in Wuxi, a packaging facility in Chongqing and a NAND flash plant in Dalian. Samsung runs a NAND flash memory chip plant in Xian and a chip packaging plant in Suzhou.