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[Alpha Biz=(Chicago) Reporter Kim Jisun] The U.S. government has decided to indefinitely suspend Samsung Electronics and SK Hynix's equipment export control to its Chinese plant.
The presidential office announced on the 9th that "the U.S. government has decided to supply U.S. semiconductor equipment to Samsung Electronics' SK Hynix's Chinese plant without any separate approval procedures or deadline." Senior presidential secretary for economic affairs Choi Sang-mok said in a briefing at the presidential office in Yongsan on the same day, "The U.S. government's decision means that the biggest trade issue of South Korean semiconductor companies has come to an end."
The U.S. government said it plans to indefinitely extend Samsung Electronics SK Hynix' moratorium on export control of semiconductor equipment to China, which expires on the 11th, through the National Security Council (NSC) economic and security dialogue channel with export control authorities. The indefinite grace period will be made by putting Samsung Electronics and SK Hynix on the Ministry of Commerce's "Verified End User (VEU)" list. VEU is a kind of permission system that allows export and import of items designated only to companies approved by the Commerce Department in advance. However, Korean and Taiwanese semiconductor companies have been suspended from applying this regulation for one year.
As regulations on semiconductors are eased, Samsung Electronics and SK Hynix are also expected to gain momentum in their Chinese businesses. This is because conditions have been created to resume long-term investment and operation plans for Chinese semiconductor facilities, which could not be considered.
The anxiety surrounding Chinese business has not been completely removed. If technology competition between the U.S. and China intensifies, it is difficult to rule out the possibility that the U.S. government will take out the "regulatory card" again.
It is observed that Samsung Electronics and SK Hynix will lower the production portion of their Chinese plants in the mid- to long-term.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
