The Biden administration effectively granted an indefinite waiver to two major South Korean firms on Monday to use U.S. semiconductor manufacturing equipment in China, according to Bloomberg.
The President of South Korea’s office said in a statement that electronics companies and top semiconductor makers Samsung and SK Hynix Inc. would be allowed indefinitely to use equipment protected under U.S. intellectual property rights in their Chinese semiconductor operations, according to Bloomberg. The Biden administration put restrictions on the semiconductor industry in October 2022 that would have prevented the import of U.S. technology if not for the waiver given to the two companies.
“The U.S. government’s decision means that the biggest trade issue for Korean semiconductor companies has been resolved,” Choi Sang-mok, an economic advisor to South Korea’s president, said in a briefing with reporters, according to Bloomberg. “Korean chip companies are key suppliers and equipment consumers, accounting for 60.5% of the world’s memory output, and their stable production is directly linked to the stability of the global semiconductor supply chain.”
The two tech firms had previously obtained a temporary waiver from the Biden administration following the October 2022 restrictions, with uncertainty around the waivers’ future leading to a lack of investment in their China operations, according to Bloomberg.
The U.S. and China are in a trade war, with both countries vying for a technological advantage in the chip industry. China has leveraged its access to raw materials like minerals that are required to build semiconductors, while the U.S. has used its intellectual property advantage to prevent Chinese technological advancement.
“Through close coordination with relevant governments, uncertainties related to the operation of our semiconductor manufacturing lines in China have been significantly removed,” a Samsung spokesperson said, according to Bloomberg. “We will continue to work closely with all relevant governments to maintain a stable supply chain for the global semiconductor industry.”
The October 2022 chip industry regulations also blacklisted multiple Chinese companies involved in the China semiconductor industry from working with U.S. companies in order to prevent them from acquiring U.S. technology. More restrictions were placed in August that limited U.S. private equity and venture capital firms from investing directly in companies that were related to the semiconductor, quantum computing and artificial intelligence sectors in China.
The U.S. Department of Commerce, Samsung and SK Hynix did not immediately respond to a request to comment from the Daily Caller News Foundation.
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