U.S. to Cap Level of South Korean Chips Made in China

According to media reports, the U.S. is likely to cap the level of advanced semiconductors made by South Korean companies in China, said Alan Estevez, the U.S. Commerce Department’s undersecretary for industry and security. The news was released during a conference at the Center for Strategic and International Studies, a Washington-based think tank.

Under the ongoing tension in Sino-US relations, the U.S. government has imposed export controls on semiconductor production in Communist China. In addition, senior U.S. officials have indicated that America is considering limiting advanced semiconductor products made in Communist China by Korean companies this year. This news could be a wake-up call for semiconductor manufacturers and the South Korean government. Samsung Electronics and S.K. Hynix, the two giant chipmakers, will have to adjust the layer limits and other regulations on the use of equipment in Communist China.

In addition, the South Korean memory-chip giant gets a one-year reprieve from U.S. export restrictions which will expire on October 7 this year. Therefore, enforcing export controls poses a challenge to two Korean chipmakers with large production facilities in China that are expected to expand their businesses in the U.S. market. Estevez said it is unclear what kind of restrictions will be enacted on the two Korean giants.