BIS to Officially Extend China-Related Chip Authorizations for Samsung, SK Hynix

The Bureau of Industry and Security this week will officially extend authorizations for South Korean semiconductor companies Samsung and SK Hynix to allow them to continue supplying certain controlled chip equipment to their Chinese factories. The move -- which formalizes authorizations that have applied to both companies since the agency issued its China chip rule Oct. 7, 2022 -- underscores the importance of the Korean chip industry to global semiconductor supply, BIS officials said.

“The U.S. and [Republic of Korea] and our companies play a critical role in the global semiconductor supply chain and today’s announcement demonstrates the strength of our partnership and commitment to a secure and transparent supply chain, particularly for memory chips,” said BIS Undersecretary Alan Estevez, who in February said the agency was working with Korean companies to extend the authorization (see 2302240008).

Thea Kendler, the agency’s assistant secretary for export administration, said U.S. national security and “the impact of our export control policies” are “best served when we foster collaboration with our international partners, and today’s rule is a further demonstration of that approach.”

The final rule, effective Oct. 17, will update BIS’ Validated End-User List by revising the list of items that may be exported under a general authorization to Samsung and SK Hynix’s fabrication facilities in China: Samsung China Semiconductor Co. Ltd. and SK Hynix Semiconductor (China) Ltd., respectively. Parties on the VEU List can apply for and obtain a general export authorization from BIS to acquire certain items rather than seeking multiple individual licenses from the agency.

The authorization for Samsung will allow exports of all items subject to the Export Administration Regulations except extreme ultraviolet (EUV) equipment and certain specially designed parts, components, software and technology necessary to develop or produce NAND memory. The authorization for SK Hynix will allow exports of all items subject to the EAR except EUV equipment and certain specially designed parts, components, software and technology necessary to develop or produce dynamic random-access memory (DRAM). The rule also outlines an exclusion under both authorizations that may be used to overcome other license requirements administered by BIS.

The agency said the authorizations “reflect close consultations” between the U.S. and South Korea “through various channels,” including an export controls working group launched by the two countries last year (see 2211090020). To qualify for a VEU authorization, parties "must clearly demonstrate the end-user’s ability to comply with the requirements of the VEU program," BIS said, which includes using items shipped under the authorization for civil end-uses only, U.S. government approvals of customers and "specific technology protection requirements and roadmaps." The authorization also "requires substantial certification, recordkeeping, reporting, and review requirements to ensure ongoing compliance."

The BIS announcement came days after both SK Hynix and Samsung said they had received assurances that they would be allowed to continue supplying their China factories with the chipmaking tools (see 2310110024 and 2310100051).