The United States will allow the export of equipment to South Korean semiconductor factories in China, Seoul's presidential office said Monday, removing a major source of uncertainty for the country's massive chip sector.
Tech giant Samsung and smaller rival SK Hynix were nearing the end of one-year waivers from US export restrictions aimed at China's burgeoning semiconductor sector.
Washington and its allies have curtailed China's access to major markets and advanced tech — including chip-making — over fears its products could give Beijing the ability to spy on their networks.
The United States announced export restrictions last October on chips used in supercomputing, as well as stricter requirements on the sale of equipment used to produce semiconductors.
The restrictions triggered concerns that the production of advanced chips at Chinese plants operated by Samsung Electronics and SK Hynix could be disrupted.
But with their waivers set to end, the US government has designated the companies' factories "verified end users", Choi Sang-mok, senior presidential secretary for economic affairs, told reporters Monday.
The decision, which eliminates the need for a separate export approval process, means the "most significant trade issue of our semiconductor companies has been resolved," Choi said.
It had "significantly alleviated companies' uncertainties over their assembly lines in China", he added.
Semiconductors have become a flashpoint issue between the United States and China, which are locked in a fierce battle over access to chip-making technology and supplies.
Last week, Taiwan said it had launched a probe to determine if four local firms had violated US sanctions in helping Chinese tech giant Huawei build semiconductor factories.
Bloomberg reported the companies involved were helping Huawei develop an "under-the-radar network" of Chinese chip plants.
The news emerged as US Commerce Secretary Gina Raimondo, testifying before Congress, described reports that Huawei was manufacturing advanced chips as "incredibly disturbing".
In June, a former Samsung executive was charged with stealing company secrets worth hundreds of millions of dollars to set up a copycat chip factory in China.
Samsung Electronics is one of the world's largest producers of chips and smartphones, and its parent group's turnover is equivalent to about one-fifth of South Korea's GDP.
Like many of the world's biggest chipmakers, a large portion of its production is based in China.
SK Hynix is the world's number two maker of DRAM chips, used in computers and servers, and runs multiple plants in China.
