Samsung, SK win US certifications for plants in China
Samsung Electronics' semiconductor plant in Xi'an, China / Courtesy of Samsung Electronics
Samsung Electronics and SK Hynix have acquired certifications from the U.S. government for their plants in China, clearing hurdles for the Korean chipmakers' operations in the world's second-largest economy, according to the Ministry of Trade, Industry and Energy, Tuesday.
The U.S. Department of Commerce last Friday released a press release, saying they designated the companies' plants in China as "validated end-users (VEUs)" and stated they are now "allowed to continue their operations in China," the ministry said.
The development came as the Korean firms have been approvedby the U.S. government's End-User Review Committee (ERC) regarding the country's national security interests.
The Korean firms can now apply for and obtain a general authorization to acquire certain items rather than seeking multiple individual licenses, according to the U.S. commerce department.
Alan Estevez, the U.S. Under Secretary of Commerce for Industry and Security, said the VEU program is important for ensuring continued partnerships that achieve the country's national security objectives.
"These authorizations are consistent with our close partnership with the Republic of Korea,” he said in the official statement from the U.S. government. "The U.S., ROK 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.”
Thea Kendler, U.S. Assistant Secretary of Commerce for Export Administration, also said the U.S. national security interests and impact of the country's export control policies are "best served when we foster collaboration with our international partners."
SK hynix's chip plant in Wuxi, China / Courtesy of SK hynix
The U.S. commerce authority said the VEU authorizations for the Korean firms reflect the close consultations between the U.S. and Korean governments through various channels including the Korea-U.S. Supply Chain and Commercial Dialogue (SCCD) and the SCCD Working Group on Export Controls announced in November 2022.
The ministry said the U.S. government's approval of VEU certification for Samsung and SK has greatly mitigated the uncertainties for the Korean conglomerates' foundry facilities in China in terms of operation and investment.
"This is an outcome of the unspared efforts by the Presidential Office and the industry ministry to keep contacting the U.S. government through all available channels," the ministry said. "Korean President Yoon Suk Yeol and his U.S. counterpart Joe Biden have consistently talked over and confirmed bilateral partnerships to protect the supply chains for semiconductor and other cutting-edge industries as well as easing export restrictions enforced by the U.S. government."
The two presidents had a series of meetings in the past year including Biden's Seoul visit in May 2022, President Yoon's Washington visit last April and a trilateral meeting at Camp David in Maryland, U.S., last August which included Prime Minister Fumio Kishida of Japan.
Following the U.S. government's enactment of the CHIPS and Science Act in August 2022, the Korean government and the world's second-biggest semiconductor market player Samsung Electronics, have been in talks with U.S. authorities in the hope of minimizing investment risks for the Korean side. The new U.S. policies stated that firms receiving the U.S. government incentives while operating in countries of concern like China, North Korea, Russia and Iran are restricted from facility expansion and sharing technologies with the countries.