Samsung is getting its chip licenses revoked in China

Samsung and SK Hynix seem to be caught in a crossfire between the US-China trade war, as the two chip manufacturers are getting their licenses revoked by the US Commerce Department and won’t be able to use new equipment in their Chinese factories.

Samsung and SK Hynix both have chip manufacturing facilities in several countries, including China. The interesting bit about the Chinese factories, however, is the fact that Samsung, for example, produces legacy chips over there, leaving the production of high-end chips in South Korea and the US.

The US is a key partner in the chip segment since it holds several manufacturing licenses for US-made equipment. The US Commerce Department has confirmed that it’s revoking Samsung’s and SK Hynix’s licenses to upgrade or expand production capacity in the country, but it will not revoke the licenses of their current facilities and equipment.

This essentially means that if equipment breaks down, Samsung and SK Hynix won’t be able to replace it.

The US is trying everything in its power to limit China’s ability to produce modern chips and shift chip production away from the country. Unfortunately, for Samsung’s chip arm, it’s another hurdle to overcome.

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