In the midst of an ongoing AI “cold war” between the United States and China, a new American proposal has surfaced that would tighten oversight of companies with extensive operations in China. As with many policy shifts, it carries both potential benefits and practical challenges. According to a Bloomberg report, Washington is considering a new approval system for exports of chipmaking supplies to Samsung Electronics Co. (SSNLF) and SK Hynix factories in China. The plan would require both companies to seek approval each year for a full list of restricted gear, parts, and materials. This would replace the long-term waivers that previously allowed them to secure supplies with less oversight.
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A New “Site License”
The proposed “site license” would require Samsung Electronics Co. and SK Hynix Inc. to specify exact quantities of items for a year at a time. Washington officials would then review and clear shipments against that list. While the process adds complexity, it avoids the burden of seeking approval for each individual shipment. Officials have said the objective is to gain visibility over supplies while keeping critical operations in place.
Both Samsung Electronics Co. and SK Hynix Inc. run large memory chip plants in China that supply smartphones, servers, and data centers worldwide. These factories are central to global supply chains, so U.S. officials have stressed they want production to continue. However, they have also indicated they will not approve shipments that could support expansion or upgrades at those sites.
Relief and Risk for South Korea
For the two companies, the change brings both relief and risk. The site license gives them a defined path forward, yet it also creates a heavier planning burden. Forecasting which parts may be required over twelve months is difficult, particularly if equipment fails without warning. Industry groups have raised concerns that approvals may not come quickly enough in urgent cases.
Meanwhile, South Korea once again finds itself in a delicate position. The country depends on its defense ties with Washington while also relying heavily on trade with Beijing. The removal of the earlier waivers has already sparked pushback from China and added unease in financial markets.
Bigger Picture
The United States first imposed broad restrictions on chip shipments to China in 2022, and then granted waivers to soften the blow for allies. The site license proposal now stands as a compromise. It would give Washington more oversight while allowing South Korea’s top chipmakers to keep operating their Chinese factories.
Talks are still ongoing and no final decision has been reached. However, the outcome will matter to investors because Samsung Electronics Co. and SK Hynix Inc. remain two of the largest players in the memory chip market. Any disruption at their Chinese facilities could have broad effects across the global electronics industry.
By using TipRanks’ Comparison Tool, we’ve lined up other notable firms that hold plants in China or rely on export to the Mainland for their top-line.
