Major chipmakers face disruption to global semiconductor production because the U.S. government plans to end waivers that let them use American technology in Chinese plants according to people who have knowledge of the matter.
Samsung Electronics SK Hynix and Taiwan Semiconductor Manufacturing Co received information from Commerce Department official Jeffrey Kessler about the Biden administration’s plan to cancel the waivers. The new regulations would force these companies to obtain fresh licenses for operating Chinese facilities with U.S.-origin technology just like other chip exporters do.
The news caused U.S. semiconductor equipment manufacturers to experience significant stock price declines with Lam Research and KLA Corp and Applied Materials each losing more than 3% of their value.
The Commerce Department spokesperson stated that Chinese operations of chipmakers remain possible under new regulations but they must undergo licensing procedures which support national security goals through reciprocal measures.
The new policy demonstrates increasing rivalry between Washington and Beijing regarding advanced technologies after Washington implemented previous restrictions on Chinese access to advanced chip technology. The new policy creates challenges for worldwide companies operating within Chinese supply chains because it affects their production and investment choices.
