U.S. grants waiver to SK hynix for tech transfers to China

A SK hynix manufacturing complex in Icheon, Gyeonggi [SK HYNIX]

SK hynix has received a one-year waiver on U.S. restrictions related to the importing of certain semiconductor-related technologies into China.

With the permission in place, the world’s second-largest memory chipmaker will be able to transfer advanced equipment essential for the operations of two dynamic random-access memory (DRAM) factories in Wuxi.

“Our discussions with the Department of Commerce led to an approval to supply equipment and items needed for development and production of DRAM semiconductors in Chinese facilities without additional licensing requirements,” the company said in a statement Wednesday.

On Friday, the United States issued new rules that would make it nearly impossible for companies to supply their factories in China with technologies for the making of DRAM memory chips rated 18 nanometer or less and NAND flash memory chips with 128 layers or more.

The United States argues that advanced chips can be used by China in weapons and in the making of weapons and can help China's communications during wartime. In the rules, the Commerce Department noted that it will review exports to China by multinationals on a case-by-case basis.

The technologies include a wide range of machines for etching, stripping and cleaning wafers.

Importing extreme ultraviolet (EUV) technology into China remains a problem even with a waiver from the new rules. Existing regulations prohibit the sale of these machines to entities in China, even if foreign owned.

Washington is now pressuring ASML, the Veldhoven, Netherlands company that monopolizes the EUV market, to stop exporting deep ultraviolet (DUV) lithography machinery to China.

The DUV machines are less advanced than the EUVs.

Samsung Electronics declined to comment on whether it has gained exemption from the new rules, though local media have reported that the company, Korea's largest, has also been granted dispensation.

A Samsung Electronics plant in Xi'an, China, produces about 40 percent of the company's NAND flash output and 10 percent of the world's total. An SK hynix plant in Wuxi, China, makes half the company's DRAMs, which are a major product for the company.

SK hynix jumped 4.21 percent to 94,000 won ($65.9) Wednesday while Samsung Electronics gained 0.72 percent to close at 55,800 won.

BY PARK EUN-JEE, LEE HO-JEONG [park.eunjee@joongang.co.kr]