US Chip Restrictions Impact SK Hynix, Samsung Shares
- tech360.tv
- 5 days ago
- 2 min read
Share prices for SK Hynix and Samsung Electronics fell on Monday. This followed Washington's revocation of authorisations for the companies. These authorisations previously allowed them to acquire U.S. semiconductor manufacturing equipment for their Chinese chip plants.
The change could hinder the South Korean chipmakers' ability to upgrade their Chinese factories. This might reduce their global competitiveness.
Both SK Hynix and Samsung are major producers of memory chips for smartphones, computers, and data centres. They previously had exemptions from broad U.S. restrictions on chip-related exports to China. The revocation of these authorisations will take effect in 120 days.
SK Hynix shares dropped 4.8%. Analysts estimate 30% to 40% of its DRAM and NAND chip production occurs in China.
Samsung appears less affected, as all its DRAM production is outside China. Approximately one-third of its NAND chips are estimated to be produced in China. Samsung shares declined 3%.
SK Hynix stated it will maintain close communication with the Korean and U.S. governments. The company plans to take necessary measures to minimise the business impact.
Samsung declined to comment on the development. Samsung Vice Chairman Jun Young-hyun had previously stated in March that the company's Chinese plants are crucial for both Samsung and the global supply of memory chips.
The announcement followed U.S. President Donald Trump's initial meeting with South Korea's new President Lee Jae Myung. They did not issue a joint statement, indicating a need for further discussion. These discussions concern South Korea's U.S. investment plans, which were previously agreed upon for tariff reductions.
A trade ministry official stated these issues are separate. The official added that rescinding the authorisations aligns with the Trump administration's policy. This policy involves reexamining export controls deemed too relaxed under the Biden administration.
Ryu Young-ho, a senior analyst at NH Investment & Securities, suggested the short-term impact for South Korean chipmakers would be limited.
Ryu noted that Samsung and SK Hynix have primarily planned new production lines and processes in South Korea. They have maintained the status quo in China, he added.
However, Ryu also suggested Washington's action could benefit rivals such as Micron. These companies rely less on China for their production sites.
Analysts also suggested the two companies might expand partnerships with Chinese equipment makers. This could help stabilise their operations in China if U.S. machinery becomes unavailable.
Shares in other South Korean chip assembly and product suppliers also fell on Monday. This was due to concerns that they too would face impacts. Hanmi Semiconductor, a key supplier for SK Hynix, dropped 6.3%, and Hana Micron declined 2.1%.
The licensing change will likely reduce sales to China for U.S. equipment makers. These include KLA, Lam Research, and Applied Materials.
U.S. President Donald Trump has also threatened a 100% tariff on semiconductor imports. While Samsung and SK Hynix might receive an exemption for investing and building U.S. factories, such tariffs would likely disrupt the global supply chain.
SK Hynix and Samsung Electronics shares dropped after Washington revoked authorisations for U.S. semiconductor equipment in China.
The revocation, effective in 120 days, could hinder the companies' ability to upgrade their Chinese chip plants.
SK Hynix plans to communicate with governments to minimise impact; Samsung declined to comment.
Source: REUTERS
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