Shares of SK Hynix (000660.KS) and Samsung Electronics (005930.KS) fell on Monday after the U.S. revoked authorizations that had allowed the companies to access American semiconductor manufacturing equipment for their chip plants in China.

Figure 1. US Stricter Chip Export Rules Hit Samsung and SK Hynix Shares.

The decision is expected to hinder the South Korean chipmakers’ ability to upgrade their Chinese factories, potentially weakening their competitive edge. Figure 1 shows US Stricter Chip Export Rules Hit Samsung and SK Hynix Shares.

SK Hynix and Samsung, leading global producers of memory chips used in smartphones, computers, and data centers, had until now benefited from exemptions to the broad U.S. restrictions on chip-related exports to China. The revocation of these authorizations is scheduled to take effect in 120 days.

Samsung is expected to be less affected, as all of its DRAM production is located outside China, though roughly a third of its NAND chips are estimated to be manufactured there. Its shares fell 3% following the news.

In response, SK Hynix stated it will maintain close communication with both the Korean and U.S. governments and take necessary measures to minimize the impact on its business.

Samsung declined to comment. In March, Samsung Vice Chairman Jun Young-hyun emphasized that its Chinese plants are vital both for the company and for the global memory chip supply.

The announcement came shortly after U.S. President Donald Trump met South Korea’s new president, Lee Jae Myung. The meeting concluded without a joint statement, as further discussions were needed regarding South Korea’s U.S. investment plans, which had been tied to tariff reductions.

A trade ministry official said the issues were separate, noting that the rescinding of authorizations aligns with the Trump administration’s policy of reexamining export controls it viewed as too lenient under the Biden administration.

Ryu Young-ho, a senior analyst at NH Investment & Securities, said the short-term impact on South Korean chipmakers would likely be limited. “Samsung and SK Hynix have planned their new production lines and processes mainly in South Korea while maintaining the status quo in China,” he said. However, he added that Washington’s action could benefit rivals like Micron, which rely less on Chinese production.

Analysts also suggested that Samsung and SK Hynix might expand partnerships with Chinese equipment makers to stabilize operations if U.S. machinery is delayed. Shares in other South Korean chip assembly and product suppliers fell Monday amid concerns of wider effects: Hanmi Semiconductor, a major SK Hynix supplier, dropped 6.3%, and Hana Micron fell 2.1%.

The licensing changes are expected to reduce sales to China by U.S. equipment makers KLA, Lam Research, and Applied Materials. Meanwhile, former President Trump has threatened a 100% tariff on semiconductor imports. Samsung and SK Hynix may be exempt if they invest in U.S. factories, but the tariffs could still disrupt the global supply chain.

Source: Reuters

Cite this article:

Priyadharshini S (2025), US Tightens Rules on Chip Production in China, Weighing on Samsung and SK Hynix Shares, AnaTechMaz, pp. 129