Anonymous but well-informed sources revealed the U.S. is rushing to address unforeseen implications of its new export restrictions on China’s chip sector that could unintentionally affect the semiconductor supply chain.
The South Korean memory tech giant SK Hynix Inc (000660.KS) claimed it had permission from the United States to acquire items for its chip manufacturing facilities in China without further licencing required by the new rules, hours before the limitation went into effect.
Separately, according to a Thursday report from Nikkei Asia, Taiwan Semiconductor Manufacturing Co (2330.TW) has obtained one-year permission to keep ordering American chipmaking machinery for its development in China.
Persons familiar with the situation said the U.S. government assured TSMC that it would be able to move the machinery to a production site in the Chinese city of Nanjing. A request for a response from TSMC was not immediately complied with.
The Biden administration had hoped to shield foreign businesses with operations in China, such as SK Hynix & Samsung Electronics Co (005930.KS), from the worst effects of new regulations, but this was not the case with the regulations released on Friday.
As written, the regulations mandate licences before U.S. shipments can be sent to Chinese factories producing advanced chips in an effort on the side of the United States to halt China’s technical and military advancements.
Additionally, if American firms or individuals are involved, vendors cannot support, service, or send non-American materials to the factories located in China as of midnight Tuesday without licences.
Because of this, it’s possible that even fundamental supplies like springs, light bulbs, and bolts—which keep tools operating—could not have been supplied until suppliers received permits. And without the hourly assistance the foundries require, one insider claimed that they would start to shut down.
The modification, according to the business, would help prevent supply chain delays, and the authorization is valid for a year.
A comment from Samsung Electronics was rejected.
According to a different source, a short-term repair was implemented while a more permanent one was being developed.
A representative for the U.S. Commerce Government declined to comment directly on the authorizations but stated that the department is interested in hearing from participants about the regulation and may take revisions into consideration.
One of the individuals claimed that without the licence, a number of equipment and other providers would have been forced to remove their staff from the Chinese fabs.
A statement from SK Hynix said negotiations with the Department of Commerce resulted in clearance to supply the tools and materials required for the design and manufacturing of DRAM chips at Chinese facilities without the need for additional licences.
The modification, according to the business, would help prevent supply chain delays, and the authorization is valid for a year.
A comment from Samsung Electronics was rejected.
Another source highlighted a short-term repair was implemented while a more permanent one was being developed.
A representative for the U.S. Commerce Government declined to comment directly on the authorizations but stated that the department is interested in hearing from participants about the regulation and may take revisions into consideration.
One of the individuals claimed that without the licence, a number of equipment and other providers would have been forced to remove their staff from the Chinese fabs.
Chip manufacturing is also run by Intel Corp (INTC.O) in China.
No relief is anticipated for Chinese chip manufacturing plants.
