Samsung Faces US Crackdown as China Chip Waivers Are Revoked

For years, Samsung has relied on its massive chip factories in China to keep the world supplied with memory. At its plants in Xi’an and Wuxi, Samsung makes NAND flash and DRAM chips that end up in several devices, including phones, AI servers, laptops, and game consoles.

These facilities are so critical that in 2023, the Biden administration granted Samsung a special waiver to keep importing US-made equipment, even as Washington tightened the screws on China’s access to advanced chip technology.

US blocks Samsung and SK Hynix from modernizing chip factories in China

But now that waiver is being taken away, reports Bloomberg. On Friday, the Trump administration announced it will revoke the exemptions, giving Samsung 120 days before the changes take effect. After that, the company will need to apply for a license each time it wants to import chipmaking tools. The Commerce Department has said it has no plans to approve requests that would allow capacity expansion or technology upgrades.

That means Samsung’s Chinese fabs can keep running, but they will not be able to modernize. The Xi’an NAND plant alone produces more than 10 percent of the world’s flash storage. Whereas, Wuxi is a cornerstone of global DRAM supply. Without access to the latest equipment, those facilities risk falling behind as rivals in South Korea and the US continue to move ahead.

Samsung is not the only one in the crosshairs. SK Hynix, another major South Korean memory maker, is also losing its waiver. The company runs a large DRAM plant in Wuxi and recently acquired Intel’s NAND business. Like Samsung, it will now be forced to maintain existing lines without upgrading to next-generation production technology.

Bloomberg cites Bernstein Research, which says the financial impact will be limited in the short term. Over time, however, Samsung and SK Hynix may be pushed to redirect future investments away from China and toward countries where US rules allow them to expand.