According to Yonhap News Agency, Choi Sang-moo, the chief economic secretary of the South Korean Presidential Office, held a press conference at the Yongsan Presidential Palace in Seoul on the 9th. The U.S. government decided to provide U.S. semiconductor equipment to Samsung Electronics and SK Hynix's factories in China without any other requirements. license.

The U.S. government recently notified South Korea through the export control department and the National Security Council (NSC) economic security dialogue channel that it decided to designate Samsung Electronics and SK Hynix's semiconductor factories in China as "verified end users" (VEU). It is reported that if it is included in the list, it will not need to obtain additional permission, which is equivalent to the indefinite suspension of US export controls on it.

Choi Sang-mok said that as far as he knows, the U.S. government has notified relevant companies of the above-mentioned decision, which will take effect once notified. This means that the biggest economic and trade iss

ue faced by Korean semiconductor companies has come to an end. This is the result of the joint efforts of the government and enterprises on the basis of the South Korea-US alliance.

The production problems of Korean companies in mainland China have been solved

Earlier reports stated that the trade and technology disputes between China and the United States have caused concerns in South Korea, a long-term ally of the United States. South Korea's economy is highly dependent on the semiconductor field. Both Samsung and SK Hynix have invested heavily in China, and China is also a major customer of South Korean chips. Seoul has been trying to mitigate the impact on South Korea's semiconductor industry after the United States imposed chip export restrictions on China.

U.S. Undersecretary of Commerce Graves previously promised that the United States will make every effort to ensure that Korean chip manufacturers can continue to do business in China and elsewhere.

According to a report on the website of the New York Times on September 27, South Korea, which relies heavily on the semiconductor industry for employment and income, is caught in a dilemma due to the trade war between China and the United States (South Korea’s long-term ally) over technology issues.

In the past 10 years, more than half of South Korea's chip exports (at one time close to 67%) were received by China. SK hynix's share of revenue from China (total revenue) peaked in 2019 at nearly 47%. It shrank to 27% last year, but (the Chinese market) is still an important part of the company's business.

One of the most outspoken South Korean politicians on the issue is Yang Hyang-ja, a member of the South Korean Congress and a former Samsung executive. She called South Korea a "victim" of the trade dispute.

Now that the equipment ban has been lifted, the production of Korean semiconductors in mainland China has been guaranteed, ensuring its supply in the mainland market to a certain extent.

What signal does the US move send?

Some people in the industry believe that the US move is intended to "loosen" the "chip ban". It is worth exploring who is the target of the US "loosening"?

It is true that for Korean semiconductors, the United States' move has cleared production obstacles in its mainland factories. For Korean semiconductor companies, it is undoubtedly a greatly beneficial "relaxation".

Recently, foreign media have also reported that due to lobbying from various parties, the United States intends to lower the threshold for its local chip companies to supply the mainland market. The United States also intends to "loosen" restrictions on local companies supplying to the mainland market to a certain extent in order to protect the market revenue and industrial status of its local companies.

But on the other hand, foreign media reported last week that the United States is expected to update regulations restricting the export of semiconductors and advanced artificial intelligence chips to China this month.

British media quoted government announcements and people familiar with the matter as reporting that the latest U.S. control order on the export of chip equipment from mainland China has entered the final review stage, indicating that the Biden administration will soon tighten restrictions on China's chip field.

Former U.S. government officials said that OMB usually does not publish these regulations until the Departments of State, Defense, Commerce, and Energy reach a consensus on the content of these regulations. On the other hand, the United States intends to impose additional restrictions on the export of high-end AI chips, but this supporting measure has not yet been officially announced. According to people familiar with the matter, the Biden administration intends to issue the above two regulations at the same time.

According to people familiar with the matter, the U.S. government will add new restrictions and fill loopholes based on the regulations introduced in October last year.

Judging from the report, the U.S. policy update to check for leaks and fill gaps has no intention of "loosening" restrictions on mainland semiconductor companies.

To sum up, the U.S.'s "one loosening and one tightening"of its chip policy this time has obvious intentions.

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