Samsung and SK Hynix Plunge as U.S. Tightens Chip Export Rules

Semiconductor Giants Face Immediate Fallout from Washington's Latest Move

Market Shockwaves

The new restrictions hit hard—Samsung and SK Hynix shares tumbled as investors processed the implications. No specific percentage drops were provided, but the sell-off was sharp and immediate.

Regulatory Squeeze

U.S. export controls just got tougher, targeting chip shipments to certain markets. The rules aim to curb technology flows but end up punishing key players in the supply chain.

Global Ripple Effects

This isn't just a Korea story—it's a reminder that geopolitics can wreck even the most solid tech valuations. Because nothing says 'stable investment' like governments changing the rules overnight.

U.S. ruling impacts sales of semiconductor equipment to China

The Department of Commerce’s Bureau of Industry and Security said it does not intend to grant licenses to expand capacity or upgrade technology at fabs in China. Both Samsung and SK Hynix have several memory plants in Korea, while Beijing also accounts for a major slice of both Korean companies’ global output. 

Samsung manufactures nearly 40% of its total NAND flash memory chips at its production plant in Xi’an, Shaanxi. SK Hynix also produces 20% of its NAND flash chips in Dalian, Liaoning, and roughly 40% of its DRAM in Wuxi, Jiangsu.

In 2023, the former-President Biden’s administration granted the duo the ability to operate in China under regulations allowing them to import semiconductor equipment without applying for a new license. The TRUMP administration seeks to overturn what’s known as the validated end user (VEU) rules. 

The Commerce Department said on Friday that the companies will now need to obtain licenses to export their technology to China, but will not be granted licenses to expand capacity or upgrade technology. As recently reported by Cryptopolitan, both firms have 120 days until the waiver expires.

“The Trump administration is committed to closing export control loopholes – particularly those that put U.S. companies at a competitive disadvantage.”

–Jeffrey Kessler, Under Secretary of Commerce for Industry and Security.

Samsung Executive Chairman Jay Lee was also asked on Sunday about the impact of the new ruling on its Chinese business and argued that the company will have to work hard. South Korea’s government said the stability of the global semiconductor supply chain depends on the stable operation of its semiconductor companies in Beijing. The government also promised to continue discussions with the U.S. to mitigate the impact on South Korean Companies.

A spokesperson for Beijing’s commerce ministry said China opposes the new U.S. ruling. The agency also said it will take necessary measures to resolutely safeguard the legitimate rights and interests of its enterprises.

U.S. ruling comes amid heightened U.S. trade policies

The new U.S. measures came amid heightened U.S. trade policies that have disrupted global trade for the better part of the year. The U.S. Commerce Department hinted in June at the possibility of revoking the rules, after a WHITE House official said the U.S. was preparing in case the truce in trade talks with South Korea fell apart.

The U.S. and South Korea agreed on a 15% levy on Seoul imports to the U.S. from August 7. China and the U.S. also agreed on 30% tariffs on Chinese imports to the U.S. and 10% levies on U.S. goods till November. As previously reported by Cryptopolitan, the country’s trade minister, Yeo Han-koo, also said both Samsung and SK Hynix are exempted from 100% U.S. levies on semiconductor equipment.

Chris Miller, the author of ‘Chip War,’ argued that the U.S. measures will make it harder for Korean chipmakers with facilities in China to continue producing more advanced chips. He also believes that the MOVE risks opening market space for Chinese firms at the expense of the Korean firms if the measure isn’t accompanied by further steps against Chinese chipmakers.

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