Report: Samsung, SK Hynix receive US approval to ship American chipmaking gear to China – News

The U.S. government will reportedly permit Samsung Electronics Co. and SK Hynix Inc. to ship American chipmaking equipment to their fabs in China.

Reuters late Monday cited sources as saying that the authorization is valid only for the next year. From 2027 onward, Samsung and SK Hynix will have to apply for new waivers on an annual basis.

In 2022, the Biden administration rolled out rules that limited the export of American chipmaking equipment to China. Companies that wished to make such shipments had to obtain a designation known as Validated End User, or VEU, status from the U.S. Commerce Department. Samsung and SK Hynix obtained the designation not long after the export restrictions went into effect.

This past August, the Trump administration canceled the companies’ VEU waivers. Had Samsung and SK Hynix not received an export authorization this week, they would have had to halt the export of chipmaking equipment to their memory fabs in China. That would have prevented the companies from upgrading their production lines or bringing new ones online.

Samsung is the world’s top maker of flash memory. SK Hynix, in turn, is the largest DRAM manufacturer. When word emerged in August that the companies had lost their VEU waivers, several U.S. suppliers of chipmaking equipment saw their share price drop.

One of the companies that saw its stock decline was Lam Research Corp., which makes dielectric etching machines. Such systems are used to create insulating, or nonconductive, structures in NAND flash chips. The insulating structures help reduce power leakage, a phenomenon that can lead to data loss if it’s not addressed.

Last year, Lam Research debuted a new version of its dielectric etching technology that operates in low temperatures to boost efficiency. The company disclosed at the time that its technology is used by all major memory chip manufacturers.

Santa Clara, California-based Applied Materials Inc. is another major equipment supplier to the memory industry. Its hardware is used to make, among other products, HBM memory. That’s the expensive, highly performant RAM variety Nvidia Corp. uses to power its graphics cards.

An HBM memory chip comprises several layers of RAM circuits that are vertically stacked atop one another. The layers are linked together by tiny wires called through-silicon vias, or TSVs. The TSV fabrication process and certain related tasks account for 10 of the 19 major manufacturing steps involved in making an HBM chip.

Applied helped develop the technical foundations of TSVs. It’s a major supplier of the machines that chipmakers use to produce the wires. Applied’s equipment can also be used to make other HBM components, including the transistors that carry out data read and write operations inside a memory chip.

In August, U.S. officials scrapped the VEU waives of not only Samsung and SK Hynix but also Taiwan Semiconductor Electronics Co. Ltd. The company operates several chip fabs in China. It’s unclear how this week’s regulatory change affects TSMC.

Photo: Unsplash