U.S. Grants Chipmakers Waiver Amid Concerns

 The U.S. move to allow the export of equipment to South Korean semiconductor factories in China is out of consideration for its own and South Korean companies, local media have said.

The U.S. government has designated Samsung Electronics and SK Hynix's chip factories in China as "verified end-users (VEU)," which allows the two chipmakers to acquire American chip-making equipment for their existing China-based facilities without having to seek separate U.S. approval.

"The purpose of restricting the entry of semiconductor equipment into China is to sanction China," Kim Yang-paeng, a researcher at the Korea Institute for Industrial Economics and Trade, was quoted by South Korean online newspaper Voice of the People as saying. The recent U.S. decision is also intended to prevent damage to South Korean companies, said Kim.

"If Samsung Electronics and SK Hynix fail to produce their products, the memory semiconductor market will be disrupted, which will affect U.S. semiconductor manufacturers," Kim said.

U.S. chip equipment suppliers are also under negative impacts of the sanctions against China, said the report.

As Samsung Electronics and SK Hynix are the main customers of Applied Materials, Lam Research and KLA, if chip-making equipment cannot be shipped to China, such U.S. chip equipment manufacturers will also suffer, it said, adding that after the U.S. restrictions on the entry of semiconductor devices into China last year, the companies said sales could fall by billions of U.S. dollars this year.

Kim was quoted by South Korean media Biz Watch as saying that if Samsung Electronics or SK Hynix shut down their plants in China, it could cause a major disruption in the global market.

As early as June, the Wall Street Journal reported that "efforts to isolate China from high-tech goods are more difficult than anticipated in a highly integrated global industry."