• The US revokes licenses for Samsung, SK Hynix, and Intel to use American semiconductor equipment in China.
• New regulations require companies to apply for licenses to purchase semiconductor equipment for Chinese manufacturing.
• This move may reduce sales for US equipment makers and shift market dynamics in favor of Chinese competitors.
• Revocations will not take effect for 120 days, allowing companies some time to adapt.
• The change follows ongoing trade tensions between the US and China, impacting various industrial sectors.

The United States is intensifying restrictions on chipmakers Samsung, SK Hynix, and Intel by revoking prior authorizations that allowed them to use American semiconductor manufacturing equipment in China. This change, as noted in the Federal Register, means these companies must now obtain licenses to buy such equipment, a significant shift from the exemptions granted in 2022 by the Commerce Department to facilitate operations in China, according to Reuters and South China Morning Post.

The new licensing requirements, effective in 120 days, will likely hinder sales for American equipment manufacturers, including KLA Corp, Lam Research, and Applied Materials. These companies had previously benefited from the authorizations and are now facing a potential drop in market activity, impacting their financial performance, as reported by Reuters, India Times, and South China Morning Post.

This revocation of authorization also eliminates the Validated End User status for Samsung and SK Hynix, which previously allowed them to receive U.S. goods more efficiently. Analysts suggest that domestic Chinese equipment manufacturers may benefit from this situation as they can fill the resultant supply gaps, potentially giving U.S. competitor Micron an edge in the market, according to South China Morning Post and Reuters.

The backdrop of this decision includes heightened trade tensions, with the U.S. and China maintaining a tariff truce amidst ongoing disputes over larger economic policies. The ramifications of this latest move could have long-lasting effects on the semiconductor sector, as the U.S. seeks to reinforce its strategic interests in technology advancement, aligning with commentary from experts who warn of negative consequences for Korean firms without parallel actions against Chinese competitors, as noted by India Times and Reuters.