South Korean authorities and representatives of SK hynix and Samsung Electronics confirmed this week that these memory manufacturers have received the right from US authorities to supply their companies in China with the equipment necessary for their modernization for an indefinite period of time, without any batch of American ones Officials must be approved. The Taiwanese company TSMC, which operates a factory in Nanjing, also receives a similar advantage.
At least loudly The Wall Street JournalTSMC can continue to benefit from preferential treatment for equipment imports for another year, and it has been maintained since October last year, when US authorities introduced corresponding export restrictions against China. South Korean companies Samsung Electronics and SK hynix were able to obtain “verified end user” status for the devices in question, the source explains. Between the United States and South Korea, under this agreement, a list of equipment was established that both companies are allowed to import into China without additional authorizations for each shipment. The relevant agreements do not contain any reference to an expiry date.
TSMC, which is interested in the possibility of supplying equipment to China to modernize its Nanjing plant producing 28nm products, has been applying a special export control regime since October last year, but informed sources explain that it is about is extended for another year. Representatives of the Taiwanese side did not comment on this information.
According to CLSA Projects, Samsung and SK hynix have invested around $40.7 billion in their companies in China since 2010. At the same time, Samsung Electronics produces about 40% of all NAND memory in China, while SK hynix produces 30% and also says it produces up to 45% of its DRAM memory in this country. Considering that Samsung, SK Hynix and Micron collectively controlled 96% of the DRAM market and about 62% of the global NAND market in the second quarter, their ability to continue producing memory in China could have a significant impact on the entire global market . For these reasons, the US authorities have granted Korean memory manufacturers relief in the area of export controls.
However, the same CLSA experts explain that the current favorable regime for the supply of equipment to China for SK Hynix and Samsung is able to solve the problems of manufacturers for a maximum of two generations of technology, but in the future both companies will inevitably rely on these exports face limitations when trying to modernize and expand their businesses in China. In addition, the current easing does not in any way remove the restrictions imposed on companies to expand their production in China while receiving American subsidies for the development of local production in the United States. Both companies will not be able to increase the area of the so-called “clean rooms” of their companies in China by more than 5-10% over a ten-year period if they agree to receive subsidies from the US authorities for construction by local companies within their area of responsibility.