EXCLUSIVE-Samsung, SK Hynix to be spared brunt of China memory chip crackdown -sources

The Commerce Department, which plans to release new curbs on exports of technology to China this week, will likely deny requests by U.S. suppliers to send equipment to Chinese firms like Yangtze Memory Technologies Co Ltd (YMTC) and ChangXin Memory Technologies, Inc (CXMT) if they are making advanced DRAM or flash memory chips, the sources said. However, license requests to sell equipment to foreign companies making advanced memory chips in China will be reviewed on a case by case basis, sources said, potentially allowing for them to receive the equipment.

The Biden administration plans to spare SK Hynix and Samsung from the brunt of new restrictions on DRAM and flash memory chip makers in China aimed at thwarting Beijing's technological ambitions and blocking its military advances, sources said. The Commerce Department, which plans to release new curbs on exports of technology to China this week, will likely deny requests by U.S. suppliers to send equipment to Chinese firms like Yangtze Memory Technologies Co Ltd (YMTC) and ChangXin Memory Technologies, Inc (CXMT) if they are making advanced DRAM or flash memory chips, the sources said.

However, license requests to sell equipment to foreign companies making advanced memory chips in China will be reviewed on a case by case basis, sources said, potentially allowing for them to receive the equipment. "The goal is not to hurt non-indigenous companies," one of the people briefed on the matter said.

The White House and Commerce Department declined to comment. SK Hynix, Samsung, YMTC, and CXMT did not respond to requests for comment. The Chinese Embassy in Washington on Thursday described the expected rules as "sci-tech hegemony." It accused the United States of using its "technological prowess ... to hobble and suppress the development of emerging markets and developing countries."

Details of some of the new regulations facing China-based memory chip makers have not been previously reported. Under the new curbs, U.S. suppliers seeking to ship equipment to China-based semiconductor firms would not have to seek a license from the Commerce Department if selling to firms producing DRAM chips above the 18 nanometer node, NAND Flash chips below 128 layers, or logic chips above 14 nanometers, the sources said.

However, U.S. companies selling sophisticated technology to indigenous Chinese chipmakers producing DRAM chips at 18 nanometers or below, NAND flash chips at or above 128 layers or logic chips at or under 14 nanometers would have to apply for a license that would be reviewed with the tough "presumption of denial" standard. U.S. suppliers seeking to sell the equipment to non-Chinese origin companies operating in China and producing those same types of chips would also face a license requirement but the applications would be reviewed on a case by case basis, the sources added.

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