China warns that move against SK Hynix and Samsung will impact global chip supply

China has condemned the United States’ decision to remove Samsung and SK Hynix subsidiaries from a trusted exporter list, warning the move will damage global supply chains and harm international technological cooperation.

The US Commerce Department said, 29 August, that it would change a Biden-era licensing system used by the two South Korean chip makers to get US equipment for their semiconductor plants in China, hoping to make it harder for the semiconductor giants to operate there.

‘The US move, driven by selfish interests and instrumentalizing export controls, will have a significant negative impact on the stability of the global semiconductor industry chain and supply chain,’ a Ministry of Commerce spokesperson said on the following day. ‘China opposes this.’

The spokesperson said China ‘urges the US to immediately correct its wrongdoing and maintain the security and stability of the global industrial and supply chains’ and warned that Beijing ‘will take necessary measures to resolutely safeguard the legitimate rights and interests of its businesses.’

The action removes expedited approval privileges that allowed the companies to purchase US semiconductor manufacturing equipment for their Chinese facilities without applying for new licenses each time. The companies will now need individual export licences for equipment shipments, potentially slowing operations at their memory chip plants in China.

Industry analysts said the licences will likely permit only maintenance, not capacity growth or technology upgrades, creating a heavy compliance burden requiring detailed filings for tools, spare parts and even software patches, along with stricter oversight of US personnel support and tighter supply-chain checks for US content.

‘Given the freeze, it will be difficult for these fabs to grow but they can tread in place and maintain operations,’ said Dawson Law, a former official with the US Treasury’s Office of Foreign Assets Control.

The action also affects US semiconductor equipment companies such as Applied Materials and KLA that count Samsung and SK Hynix as key customers, highlighting the interconnected nature of global supply chains.

 ‘The US has effectively declared that no foreign-owned fab in China will enjoy fast-track treatment, Law said. ‘This sets a clear precedent for Taiwanese, Japanese, and European chipmakers operating in China who now need to review their options and consider what this means for their China operations. The underlying message is consistent: Washington will permit sustainment, but not expansion, regardless of a firm’s nationality in the context of China.’