The U.S. has informed three Asian chip manufacturers that they can maintain their current operations in China for the foreseeable future, however vital tech upgrades would prove difficult, The Wall Street Journal reported.
Earleir this week, it was reported that the U.S. would allow Samsung Electronics (OTCPK:SSNLF) and SK Hynix to buy the equipment they require to maintain and expand their large chipmaking operations in China. The Biden administration has effectively granted the two South Korean companies an indefinite waiver on broader restrictions banning the shipment of advanced chipmaking gear to China.
Taiwan Semiconductor Manufacturing (NYSE:TSM) is anticipated to be granted another one-year waiver like the one it received last year, The WSJ reported citing people familiar with the U.S. government's operations.
The U.S. has told the Taiwan-based company that it can maintain its operations in China for the foreseeable future as long as it does not make significant technological upgrades, the report added.
It is not known if TSM would be designated as a "validated end user" as Samsung and SK Hynix have been or if the Korean companies will be issued a separate one-year waiver. According to the South Korea's presidential office statement the designation does not have an end date, the report noted.
South Korea and the U.S. have agreed to a list of pre-approved chipmaking equipment which would allow the two Korean companies to maintain their China-based facilities and undertake minor upgrades to current production technology, according to the report.
In October 2022, the U.S. unveiled new curbs on exports of certain advanced semiconductor manufacturing equipment to companies in China. Samsung and SK Hynix had secured a one-year waiver over concerns that the move would disrupt their businesses in China.
In September, the U.S. Commerce Department issued final rules aimed at restricting expansion in China by semiconductor companies which would receive federal funds. The agency, however, removed a curb in the initially proposed terms. Previously, the agency defined significant transactions based on a monetary level of $100,000. The Department would now define "significant" as it weighs awards to individual companies rather than via rule-making.
Taiwan Semiconductor may get US waiver for chip equipment to China
The U.S. is allowing some Asian chip manufacturers to maintain operations in China, but tech upgrades may be difficult. Read more here
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