samsung and sk hynix face hurdles in china as us shifts policy

2025-09-04 general

Washington, D.C., Thursday, 4 September 2025.
samsung and sk hynix’s operations in china are now in question. the us government has revoked their validated end user (veu) status. this policy change requires them to seek individual licenses for using us equipment in china. this introduces uncertainty for the south korean firms. samsung produces 35-40% of its nand in china, while sk hynix produces 40% of its dram there. these changes could significantly impact their production and market position.

Impact on stock valuations

The revocation of VEU status, effective september 2, 2025, immediately casts a shadow over samsung and sk hynix stock valuations [1]. Investors typically react negatively to increased regulatory hurdles and uncertainty [GPT]. The need for individual licenses introduces potential delays and added costs, directly impacting profitability [1]. Furthermore, restrictions on expanding capacity or upgrading technology in their chinese fabs limit long-term growth prospects, making these stocks less attractive [1]. This could trigger a sell-off as investors re-evaluate the companies’ future earnings potential [GPT].

This policy shift could indirectly benefit chinese competitors like ymtc, which aims to increase its global production share to 15% by 2026 [1]. While samsung and sk hynix face limitations, ymtc may seize the opportunity to expand [1]. The trump administration’s stance on closing “export control loopholes” suggests a broader strategy to protect us companies [1]. This includes taking a 15% revenue share from nvidia and amd’s ai chip sales in china for issuing licenses [1]. Such measures could reshape the semiconductor market, favoring domestic chinese firms and us companies at the expense of south korean giants [GPT].

Operational adjustments and future strategies

Sk hynix is set to bring its new m15x facility online in cheongju later this year [1]. This move signals a potential shift in investment focus away from china [1]. However, the immediate challenge involves navigating the new licensing requirements to maintain existing operations [1]. The bureau of industry and security (bis) intends to grant export licenses for current fabs but not for expansion or upgrades [1]. Samsung, currently upgrading its plant in xian, faces an immediate need to secure licenses to continue these upgrades [1].

Geopolitical context and broader implications

The us policy shift occurs amid heightened geopolitical tensions [2]. Donald trump has expressed dissatisfaction with china, north korea, and russia, accusing them of “colluding against the united states” [2]. China’s display of icbms and advanced military hardware at a recent parade further exacerbates these tensions [2]. These events suggest a hardening stance towards china, impacting not only semiconductor firms but also broader trade and diplomatic relations [2]. South korea’s government is now reconsidering joining the comprehensive and progressive agreement for trans-pacific partnership (cptpp) [2].

Bronnen

semiconductor policy china operations