US suggests limiting semiconductor production in China… Are Samsung and Hynix affected?

It is pointed out that the United States has suggested limiting the technological level of South Korean semiconductor companies operating in China. There are concerns about the impact on Samsung Electronics and SK Hynix, which manufacture DRAM and NAND flash memory in China.

At the Korea-US Economic Security Forum on the 23rd (local time), US Under-Secretary of Commerce Alan Esteves said, “It is very likely that companies (such as Samsung Electronics and SK Hynix) will put a cap on the level of the width -conductors they can produce.” If a company is currently producing a certain number of NAND flashes, it will be stopped at some level in that range.”

The ‘level’ mentioned here means the ‘stacking’ level, how high the NAND flash memory cells are stacked. The higher the level, the more competitively NAND technology is evaluated. Currently, Samsung Electronics produces 128-layer NAND flashes in Xian, China, and SK Hynix produces 96-layer and 144-layer NAND flashes in Dalian. I mentioned ‘under’ as an example, but DRAM can also set the same standard as 16 nanometers (nm).

In October last year, the US set such limits in its semiconductor export regulations to China. △ 128-layer or higher NAND flash △ 18-nano DRAM △ 16-nano system semiconductor production equipment and technology that can be supplied to China must be approved by the US Department of Commerce. However, Samsung Electronics and SK Hynix received a one-year grace period from the application of this regulation.

Vice Minister Esteves’ comments suggest that Samsung Electronics and SK Hynix products produced in China may be subject to restrictions in the future. If the grace period expires, there is a possibility that China will not be able to produce 128-layer or higher NAND flash and 18-nano DRAM in accordance with previously announced restrictions on technology exports to the public.

Samsung Electronics produces 40% of its total NAND production at its Xian plant in China, and SK Hynix produces half of its DRAM production at its Wuxi plant. If the Chinese factories are subject to technology limitations, the global production system will have to be reorganized, which will put a significant burden on Samsung Electronics and SK Hynix. In a situation where Chinese memory companies such as YMTC are chasing after securing more than 200-layer NAND technology, the possibility of weakening the competitiveness of Korean companies is also raised. Samsung Electronics and SK Hynix are in a position to keep a close eye on the situation as the US regulations are not yet clear.

Reporter Dongjun Kwon