The U.S. Department of Commerce has allegedly proposed issuing annual permits for the two South Korean memory chip giants
In sum – what to know:
Conditional approvals under review – Washington is considering yearly permits for Samsung and SK Hynix to import U.S. equipment into Chinese plants, replacing the earlier indefinite waivers.
Heavy reliance on China output – Samsung and SK Hynix manufacture up to 40% of their NAND and DRAM in China: mostly general-purpose chips, not high-bandwidth memory for AI.
Critics doubt long-term impact – While the scheme could reduce disruption, U.S. bans on upgrades mean the move may not meaningfully expand or modernize the companies’ Chinese operations.
The U.S. government is weighing a plan to let Korean companies Samsung Electronics and SK Hynix bring American-made chipmaking equipment into their plants in China under a limited approval framework.
According to Bloomberg, the U.S. Department of Commerce has proposed issuing annual permits for the two South Korean memory chip giants, replacing the indefinite authorizations previously granted under the Biden administration. The idea of a “site license” was recently presented to Korean officials, according to sources familiar with the matter.
Samsung and SK Hynix were previously covered by the U.S. Validated End User (VEU) program, which allowed certain factories in China to import U.S.-made tools without additional licenses. That privilege ended after the Trump administration removed their Chinese plants from the VEU list, raising concerns about supply disruptions and difficulties in maintaining operations.
Both companies rely heavily on their Chinese facilities. Samsung manufactures around 35–40% of its NAND flash chips in Xi’an, while SK Hynix produces roughly 40% of its DRAM in Wuxi and 20% of its NAND in Dalian. These factories, however, are focused on general-purpose chips rather than advanced products like high-bandwidth memory (HBM) used in artificial intelligence.
The new proposal would give Samsung and SK Hynix some assurance that they can keep their production lines running, but it also introduces more bureaucracy. Under the scheme, companies would need to apply annually for approval of specific quantities of restricted tools, according to the report.
Critics argue the plan’s impact may be limited since Washington still intends to block any exports that could enable technological upgrades at the Chinese facilities. Talks between Washington and Seoul are ongoing, with no final decision yet, it added.
The U.S. government has recently revoked Taiwan Semiconductor Manufacturing Company’s (TSMC) license to freely ship equipment from the United States to China, a move set to take effect on December 31, according to international press reports.
The decision removes TSMC’s “validated end user” status and means that future shipments to its Nanjing facility will now require individual export licenses. The Chinese plant manufactures older-generation chips, while TSMC’s most advanced semiconductors are still produced in Taiwan and the U.S., according to the reports.
The U.S. Bureau of Industry and Security has already stated it “does not intend to grant licenses to expand capacity or upgrade technology at fabs in China.”
U.S. AI chipmaker Nvidia’s CEO Jensen Huang recently said there is a “real possibility” that the company’s advanced Blackwell processors could be sold in the Chinese market, as he pressed U.S. officials to allow American chipmakers more access to the market.
Speaking on Nvidia’s latest earnings call, Huang noted that China’s AI market could expand by 50% next year, estimating a $50 billion opportunity in 2025. “The opportunity for us to bring Blackwell to the China market is a real possibility,” Huang said. “We just have to keep advocating the importance of American tech companies to be able to lead and win the AI race, and help make the American tech stack the global standard.”
Huang’s remarks follow his visits to the White House in July and August to seek export licenses for Nvidia’s H20 chip, currently restricted by U.S. rules. In August, the Trump administration struck a deal allowing Nvidia to sell H20s in China, provided 15% of revenue goes to the U.S. government.
