According to sources familiar with the matter, a U.S. official has informed the three major semiconductor companies worldwide – South Korea’s Samsung Electronics, SK Hynix, and Taiwan Semiconductor Manufacturing Company (TSMC) – of plans to revoke the waivers that allow these companies to use American chip manufacturing equipment in their factories in China.
The Wall Street Journal reported on Friday that currently, these companies enjoy “comprehensive exemptions” to transport U.S. chip equipment to their Chinese facilities without the need for case-by-case licensing applications. Sources revealed that Jeffrey Kessler, the head of the Bureau of Industry and Security at the U.S. Department of Commerce, indicated in a meeting this week that this move could be part of the Trump administration’s efforts to curb the flow of key U.S. technologies to China.
Currently, the U.S. and China are engaged in further negotiations based on the preliminary agreement reached earlier this month in London. The agreement includes provisions such as delaying the introduction of new export controls.
White House officials stated that this action is not a new trade escalation but aims to make the licensing system for chip equipment equivalent to China’s existing rare earth material licensing system. They noted that progress continues to be made in finalizing the London agreement and trade negotiations between the U.S. and China.
The Department of Commerce emphasized that the three companies can still operate in China but will need to apply for licenses on a case-by-case basis, similar to other semiconductor companies exporting to China, in order to “ensure a fair and reciprocal review process for the United States.”
This policy specifically affects facilities like Samsung’s storage chip factory in Xi’an, China. While these factories may not employ cutting-edge technology, their products are widely used in industries such as automotive and consumer electronics. Industry experts warn that while the restrictions may not immediately halt their operations, the long-term effects could impact operational efficiency and global supply chains.
Following the news, several U.S. chip equipment vendors experienced significant stock declines. KLA fell by 3.8%, while Applied Materials and Lam Research dropped by 3.8% and 4.7% respectively.
The recent U.S. ban on Nvidia and AMD exporting high-end chips to China has resulted in revenue losses in the billions for the related companies.
In response, these companies have adjusted their shipping strategies to China, shifting the focus of shipping high-end products to the U.S. market. They have also announced multiple investments in large AI computing centers in the U.S. For example, Nvidia plans to invest billions in Arizona and Texas for the production of its Obsidian series AI chips. These investments align with tariff and export restriction policies.
South Korea and Taiwan are both in negotiations with the U.S. for broader trade agreements, which are part of a series of agreements the Trump administration hopes to reach in the coming weeks.
Both South Korea and Taiwan have close relations with the U.S., cooperating not only in military and technology fields but also with restrictions on advanced technology transfers to China. In recent years, Samsung Electronics, SK Hynix, and TSMC have invested billions in the U.S., receiving support from Washington.