The United States government has issued annual export licences to South Korean tech giants Samsung Electronics and SK Hynix to bring their semiconductor manufacturing equipment to their production facilities in China throughout 2026.
The move provides temporary relief for memory-chip giants after Washington revoked previous blanket export waivers. Still, it is also a major shift in how export controls will be implemented going forward.
New Licence System Eases Out the Broad Waivers
Under the new regime, Samsung and SK Hynix will have to file for annual licences to import chipmaking tools into China, replacing a previous framework known as Validated End User (VEU) status, which expires on 31 December 2025. That status had entitled them to get access to certain US-origin technology without individual export licences, provided that factories adhered to ongoing security commitments.
The shift means that starting in 2026, shipments of US semiconductor manufacturing equipment into Chinese plants will be allowed only with a specific license for the year, giving US regulators more direct oversight of what enters China's chip ecosystem.
Strategic Importance of Chinese Fabs
China remains a vital manufacturing base for both Samsung and SK Hynix, especially in the case of traditional memory chips, which are used in everything from smartphones to data centre servers. The demand for these chips has increased dramatically in recent years due to the growth of artificial intelligence and cloud computing, which has contributed to supply tightness and higher prices.
For South Korea's largest tech exporters, continuity of production in Chinese facilities is a commercial imperative, and disruption would ripple through global supply chains. The annual licences, therefore, offer a degree of stability at the cost of being more heavily regulated.
Policy Shift Amid Wider Export Controls
In tightening the rules, Washington aims to restrict China's access to high-technology semiconductor technologies that could enhance its ability to produce consumer goods domestically or for military purposes.
Under the old system, Samsung, SK Hynix, and Taiwan's TSMC all benefited from VEU exemptions under the old system. But it appears that, if that privilege lapses, each export of controlled equipment into China is now subject to annual approval, albeit with an expectation that regular maintenance and routine tool shipments will be included under the new annual licence.
Industry analysts say this is part of a larger strategy that includes both economic pragmatism and geopolitical caution: The US does not want to inadvertently help China improve its technological abilities, but it also does not want to see major disruption to global electronics manufacturing.
Caught Between Giants: South Korea's Strategic Dilemma
For South Korea such a change calls for attention to a rather complex strategic reality. Samsung and SK Hynix depend on the US as a key security partner, China is their biggest trading partner and a critical production hub. Many of their Chinese fabs make a sizeable portion of the total memory production for each company, especially NAND flash chips and DRAM chips.
Earlier stories showed that US authorities had raised the idea of 'site licence' as a way to require companies to state the types and amount of equipment for annual review, rather than seeking approvals on a shipment-by-shipment basis. This was considered a method of decreasing the amount of administration, and saving thousands of individual permit applications each year.
However, the existence of the annual licence does not prevent uncertainty. Chipmakers need to have an accurate picture of their tooling requirements for the year, and unexpected requirements, for example, for urgent repairs, could still be subject to delay, if required under the licence.
What This Means for the Chip Industry
The renewed licensing regime is a double-edged sword. While it enables Samsung and SK Hynix to maintain critical operations in China without disruption, it locks them more firmly into the US-China technology rivalry.
Export controls have now become an element of a wider geopolitical strategy, designed to slow down China's rise in semiconductor capability without causing a supply-chain shock. Yet this balancing act may prove to be fragile, particularly if political tensions escalate or if the annual review process becomes more restrictive.
For now, the annual licences provide some continuity, but one that exists squarely within the shifting terrain of global tech competition.
