Tighter US export controls could reshape Korean chipmakers’ China operations, with Washington weighing annual approval plans for Samsung, SK hynix, and even TSMC’s Nanjing plant.
The United States is reportedly preparing to introduce an annual approval mechanism for shipments of chipmaking tools to Samsung Electronics and SK hynix facilities in China, according to a report by Bloomberg.
The plan would replace existing waivers, granted during the Biden administration, which gave the South Korean companies indefinite permission to supply restricted equipment. Those permissions, known as Validated End User designations, are scheduled to expire at the end of this year.
The report stated that the US Commerce Department officials suggested a “site licence” during discussions with their Korean counterparts. This would allow Samsung and SK hynix to obtain clearance once a year for specified quantities of restricted machines, spare parts, and materials.
Unlike the current system, companies would not need separate authorisation for every shipment, although anything outside the agreed quota would still require additional approval. Analysts believe a return to the previous VEU arrangement remains unlikely.
China remains a vital production base for both memory makers. Their local plants primarily focus on mainstream chips, yet still contribute significantly to global output.
Research firm TrendForce estimates that in 2025, around one-third of Samsung’s NAND supply will come from China. For SK hynix, the share is projected to be even higher, with 35–40% of DRAM and up to 45% of NAND production originating there.
The export review is not limited to Korean firms. TSMC has confirmed that Washington will also withdraw the VEU designation for its Nanjing plant by December 2025. Taiwan’s Ministry of Economic Affairs noted that the site, which manufactures 16-nanometre chips, accounts for only about 3% of TSMC’s overall capacity, a share expected to decline further.
