The US government has granted annual export licenses to Samsung Electronics and SK hynix, allowing them to continue shipping chip manufacturing equipment to their production facilities in China throughout 2026. According to sources close to the decision who spoke to Reuters, these approvals will replace the long-standing exemption system that is set to expire on December 31st.
Annual License Model Begins
Until now, companies like Samsung, SK hynix, and TSMC benefited from an approved end-user status granted to foreign-invested factories in China. This status allowed US-origin semiconductor manufacturing equipment to be sent to China without requiring a separate license for each shipment. However, this system will completely end on December 31st, and a stricter regime requiring individual permits for US-sourced production tools will come into effect.
According to Reuters, the Washington administration, aiming to ease this transition, has issued annual export licenses to Samsung and SK hynix, valid for the 2026 calendar year. Sources indicate that with this decision, the US is permanently abandoning the old and "overly lenient" exemptions, and will re-evaluate chip manufacturing equipment exports to China on an annual basis going forward.
These licenses are of vital importance for Samsung and SK hynix, which are heavily dependent on China for memory production. Samsung produces a significant portion of its global NAND flash, while SK hynix manufactures a substantial part of its DRAM and NAND in China. These factories meet a considerable share of the world's supply, especially for mature-process DRAM and NAND products.
Over the past year, the rapid increase in memory prices due to rising demand from AI-focused data center investments has further highlighted the importance of these facilities operating without interruption. Therefore, the timely supply of production equipment is considered critical for the operational continuity of both companies.
On the other hand, the transition to an annual license model introduces a new layer of uncertainty for chip manufacturers. The annual renewal process grants the US administration the authority to modify or completely revoke license terms based on geopolitical, commercial, or national security conditions. This situation is expected to affect not only manufacturers but also US chip equipment suppliers such as Applied Materials, Lam Research, and KLA.
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