Washington: The U.S. Commerce Department has announced a plan that will require South Korean tech giants Samsung Electronics Co. and SK hynix Inc. to obtain licenses for sending specific U.S. chipmaking equipment to their manufacturing facilities in China. This change comes as a result of the decision to strip these companies of their "validated end-user (VEU)" status.
According to Yonhap News Agency, the department's Bureau of Industry and Security stated on the Federal Register that it will revise the current VEU authorizations list for China. This revision involves removing Samsung Electronics, SK hynix, and Intel Semiconductor Ltd. from the list, a move anticipated to impact the production volume of these chipmakers in China significantly.
Under the previous Biden administration, the VEU status granted to Samsung and SK hynix allowed for a reduced licensing burden. This status enabled the companies to ship certain U.S. semiconductor equipment to pre-approved sites in China under a general authorization, bypassing the need for individual export licenses.
The new decision is scheduled to take effect 120 days following its official publication date on September 2. This policy shift aligns with the U.S.'s broader strategy of tightening export regulations on advanced technologies to China, amid growing competition between the two nations over technological dominance and other strategic areas.