AsianFin -- Shares of South Korean chip giants Samsung Electronics and SK Hynix slid on Monday after the U.S. government revoked authorizations that had allowed the companies to access American semiconductor manufacturing equipment for their China-based facilities.
Until now, both firms had benefited from exemptions to broad U.S. export restrictions on chip-related technologies to China. The new rules are set to take effect in 120 days, complicating operations for the South Korean memory-chip leaders.
SK Hynix, which produces DRAM and NAND memory chips, saw its shares drop 5%. Analysts estimate that 30% to 40% of SK Hynix’s memory chip output is manufactured in China, making the company particularly exposed to the tightening restrictions.
Samsung, by comparison, has only its NAND production in China, accounting for roughly a third of its global output. Its shares fell 2.6% following the announcement.
Together, the two South Korean firms dominate the global memory chip market, controlling approximately 70% of DRAM production and 54% of NAND output. These chips are critical components for data centers, artificial intelligence, and other high-performance computing applications.
Ryu Young-ho, senior analyst at NH Investment & Securities, noted that while the new rules could create challenges, the short-term impact on both companies is likely to be limited.
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