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Samsung Gets One-Year Exemption From New U.S. Chip Restrictions on China

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The groundbreaking ceremony for a Samsung chip production line in Xi’an, China, in 2018.



Photo:

Yonhap News/Zuma Press

SEOUL—

Samsung Electronics Co.

has been granted a one-year exemption from new U.S. restrictions that block exports of advanced chips and related equipment to China, according to people familiar with the matter, joining a list of American-allied semiconductor giants that have received dispensation.

The U.S. Department of Commerce granted Samsung authorization to continue receiving chip-making equipment and other items needed to maintain its memory-chip production in China, the people said. The South Korean firm operates chip facilities in two Chinese cities.

Samsung, the world’s largest memory-chip maker by revenue, hasn’t said publicly if it received a one-year exemption, like rivals

SK Hynix Inc.

and

Intel Corp.

have disclosed. A Samsung spokesman declined to comment.

The Biden administration has been working to get allies on board with the new rules, which were unveiled Friday. The restrictions appeared to offer at least one concession to some of the allies, as the Commerce Department would review applications for certain exports to U.S. and U.S.-allied facilities operating in China on a case-by-case basis. Chinese-owned facilities, in contrast, would face a presumption of denial.

Exemptions for a variety of semiconductor and chip-equipment makers from the U.S. or allied countries are widely expected by industry officials.

Samsung dominates production of two major types of memory chips—DRAM and NAND flash. The South Korean tech giant operates a NAND flash memory-chip plant in Xi’an and a chip-packaging facility in Suzhou.

As of the second quarter of this year, Samsung accounted for 43.5% of global revenue for DRAM and roughly one-third of global revenue for NAND flash, according to TrendForce, a Taiwan-based tech-market researcher. It is the No. 1 player in both memory markets.

Write to Jiyoung Sohn at [email protected] and Asa Fitch at [email protected]

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