U.S. likely to cap Korea chip tech in China from October

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U.S. likely to cap Korea chip tech in China from October

Published: 26 Feb. 2023, 15:52 Updated: 26 Feb. 2023, 16:12

Alan Estevez, undersecretary of commerce for industry and security in the United States, during a forum hosted by the Center for Strategic and International Studies and Korea Foundation, on Thursday in Washington. [SCREEN CAPTURE]

Korean chipmakers could face restrictions in China from the U.S. government starting in October, according to a senior U.S. official in Washington.

On Oct. 7 last year, the U.S. Commerce Department announced a series of measures to limit China's access to technology that could be used in weapons or to develop weapons.

The rules mandated companies to acquire approval from the U.S. government to supply their factories in China with technologies for the making of DRAM memory chips rated 18 nanometers or less and NAND flash memory chips with 128 layers or more.

Samsung Electronics and SK hynix, which are running chip plants in China, received one-year waivers for the newly imposed rules in October.

Discussions are now ongoing as to what happens when the waivers end, and so far signals suggest that the manufacturers will be under pressure from the U.S. government to limit what they do in China.

“We are working with those companies on the way forward. So there will likely be a cap on the levels that they can grow to in China,” said Alan Estevez, undersecretary of commerce for industry and security, when asked about restrictions on Samsung Electronics and SK hynix after the one-year deadline passes. “We are in deep dialogue with the companies around that.”

Estavez, who made the comments during a forum hosted by the Center for Strategic and International Studies and the Korea Foundation, did not offer details as to what is being considered, only saying that discussions are underway and that certain limits will be put in place.

"The government will engage in close discussions with the United States on the extension of licenses given on importing semiconductor equipment," the Ministry of Trade, Industry and Energy said in a statement on Friday.

“Korea and the United States are in agreement on not undermining the ongoing semiconductor production or investments by Korean chipmakers in China,” the Industry Ministry said.

The Samsung Electronics plant in Xi'an, China, is the company's only memory chip production line overseas. It makes 40 percent of the company's NAND flash production and 10 percent of the world's total. Samsung is currently producing 128-layer NAND flash memory at the plant.

An SK hynix plant in Wuxi, China, makes 96-layer and 144-layer NAND flashes as well as half its DRAMs.

"If you're at whatever layer of NAND, we will stop it somewhere in that range," said Estevez, indicating that the companies may not be able to produce NAND flashes with more than a certain number of layers after the one-year reprieve expires.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]