US may target Samsung, Hynix, TSMC operations in China, sources say
In 2023 and 2024, the companies received what is known as Validated End User status in order to continue the trade. PHOTOS: AFP, REUTERS
SAN FRANCISCO - The US Department of Commerce is considering revoking authorisations granted in recent years to global chipmakers Samsung, SK Hynix and TSMC, making it more difficult for them to receive US goods and technology at their plants in China, according to people familiar with the matter.
The chances of the United States withdrawing the authorisations are unclear. But with such a move, it would be harder for foreign chipmakers to operate in China, where they produce semiconductors used in a wide range of industries.
A White House official said the United States was 'just laying the groundwork' in case the truce reached between the two countries fell apart. But the official expressed confidence that the trade agreement would go forward and that rare earths would flow from China, as agreed.
'There is currently no intention of deploying this tactic,' the official said. 'It's another tool we want in our toolbox in case either this agreement falls through or any other catalyst throws a wrench in bilateral relations.'
Shares of US chip equipment makers that supply plants in China fell when the Wall Street Journal first reported the news earlier on June 20. KLA Corp dropped 2.4 per cent, Lam Research fell 1.9 per cent and Applied Materials sank 2 per cent. Shares of Micron, a major competitor to Samsung and SK Hynix in the memory chip sector, rose 1.5 per cent.
A TSMC spokesman declined comment. Samsung and Hynix did not immediately respond to requests for comment. Lam Research, KLA and Applied Materials did not immediately respond, either.
In October 2022, after the United States placed sweeping restrictions on US chipmaking equipment to China, it gave foreign manufacturers like Samsung and Hynix letters authorising them to receive goods.
In 2023 and 2024, the companies received what is known as Validated End User status in order to continue the trade.
A company with VEU status is able to receive designated goods from a US company without the supplier obtaining multiple export licenses to ship to them. VEU status enables entities to receive US-controlled products and technologies 'more easily, quickly and reliably,' as the Commerce Department website puts it.
The VEU authorisations come with conditions, a person familiar with the matter said, including prohibitions on certain equipment and reporting requirements.
'Chipmakers will still be able to operate in China,' a Commerce Department spokesperson said in a statement when asked about the possible revocations. 'The new enforcement mechanisms on chips mirror licensing requirements that apply to other semiconductor companies that export to China and ensure the United States has an equal and reciprocal process.'
Industry sources said that if it became more difficult for US semiconductor equipment companies to ship to foreign multinationals, it would only help domestic Chinese competitors.
'It's a gift,' one said. REUTERS
Join ST's Telegram channel and get the latest breaking news delivered to you.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
40 minutes ago
- Straits Times
Meta launches $513 Oakley AI glasses with 3K video recording
The display-free Oakley glasses are one component of the overall Meta AI hardware strategy. PHOTO: META Meta Platforms Inc. is going up-market with its surprise hit smart glasses, rolling out new models with Oakley that are aimed at athletes and include improved video recording. The company on June 20 launched new models based on Oakley's HSTN design, marking the company's first expansion away from Ray-Ban for its display-free glasses. Like the original models, the Oakley versions can make and take phone calls, play music, take pictures and video and use Meta's artificial intelligence to answer questions about the surrounding environment. The new versions, which start at US$399 (S$513) and go up to US$499 for a limited edition model with gold-colored accents, include about double the battery life, video-recording at 3K resolution and water resistance. 'We are increasingly seeing performance use cases with the Ray-Bans like people wearing them on roller coasters, cycling and being around water, so we're trying to lean into that,' says Mr Alex Himel, the company's vice-president in charge of wearables, in an interview. Arriving at its second glasses brand was far from a sure thing. Meta's first glasses, the Ray-Ban Stories, flopped in 2021. But its follow-up version in 2023 was a massive success, giving the social networking giant a real potential hardware stronghold in the artificial intelligence race. 'It was crazy. Popularity caught us by surprise a bit,' Mr Himel said. The Ray-Bans were 'going to be the last display-less pair of glasses. We said we'll take two swings at it, and if it doesn't work we'll go all-in on augmented reality'. Instead, beyond the latest Oakley model, the company has a multi-year road map for the display-less category and is planning a follow-up pair of Oakley glasses based on the Sphera design for later in 2025 , according to people with knowledge of the matter. That pair will be aimed at cyclists and have a centred camera. The model on June 20 has a camera positioned in the upper corner like the Ray-Ban version. The display-free glasses are one component of the overall Meta AI hardware strategy. The company is planning to introduce higher-end glasses with a display to view notifications and the camera view finder later in 202 5, Bloomberg News has reported. In 2027, it aims to roll out its first true augmented reality glasses, which will blend digital apps with the real world. Meta's form-factor has caught on, with several other technology companies working on competitors. Apple Inc. is planning to introduce its first glasses product at the end of 2026, Bloomberg News has reported. That device will operate similarly to the Meta product but better synchronise with the rest of the Apple ecosystem. Inc. also sells glasses, but their current models lack cameras. Mr Himel, who said Meta has sold millions of glasses and has a 'nice, increasing multiple' of purchases on a year-over-year basis each week, attributed the increased popularity to the Ray-Bans improving across a large number of 'small things.' He said the audio quality and microphones started to surpass standalone earbuds, while the camera and AI quality also improved. Still, Mr Himel said battery life remains the 'number one complaint' about the Ray-Ban versions. The new Oakley models can run for 8 hours on a single charge, with the charging case holding 48 hours of juice. 'You should expect a 40 per cent bump with these' he says, attributing the improvement to new battery chemistry and software optimisations – not larger battery packs. Like Ray-Ban, Oakley is owned by EssilorLuxottica SA, which calls Oakley its second most popular brand after Ray-Ban. Mr Himel said Meta will roll out new brands under the EssilorLuxottica portfolio 'as fast as we can. 'We're going to have to move very quickly because in the world of fashion, stuff moves very quickly,' he says. 'The stuff that is a hit right now might not be a year from now. We need to be fast to hit all the brands that we'd like to.' The first Oakley model, becoming available for pre-order on July 11, will be the US$499 limited edition pair. The US$399 versions – which come in grey, black, brown and clear colors – will be released in the coming months. There will be versions with clear, transition and polarised lenses. Like with the Ray-Bans, users can swap the lenses for prescription optics. The glasses will be available in the US, Canada, UK, Ireland, France, Italy, Spain, Austria, Belgium, Australia, Germany, Sweden, Norway, Finland, and Denmark, according to Meta. BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
2 hours ago
- Business Times
US may target Samsung, Hynix, TSMC operations in China: sources
[BENGALURU] The US Department of Commerce is considering revoking authorisations granted in recent years to global chipmakers Samsung, SK Hynix and Taiwan Semiconductor Manufacturing Company (TSMC), making it more difficult for them to receive US goods and technology at their plants in China, according to sources familiar with the matter. The chances of the United States withdrawing the authorisations are unclear. But with such a move, it would be harder for foreign chipmakers to operate in China, where they produce semiconductors used in a wide range of industries. A White House official said the United States was 'just laying the groundwork' in case the truce reached between the two countries fell apart. But the official expressed confidence that the trade agreement would go forward and that rare earths would flow from China, as agreed. 'There is currently no intention of deploying this tactic,' the official said. 'It's another tool we want in our toolbox in case either this agreement falls through or any other catalyst throws a wrench in bilateral relations.' Shares of US chip equipment makers that supply plants in China fell when The Wall Street Journal first reported the news earlier on Friday (Jun 20). KLA dropped 2.4 per cent, Lam Research fell 1.9 per cent and Applied Materials sank 2 per cent. Shares of Micron, a major competitor to Samsung and SK Hynix in the memory chip sector, rose 1.5 per cent. A TSMC spokesperson declined to comment. Samsung and Hynix did not immediately respond to requests for comment. Lam Research, KLA and Applied Materials did not immediately respond, either. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up In October 2022, after the United States placed sweeping restrictions on US chipmaking equipment to China, it gave foreign manufacturers such as Samsung and Hynix letters authorising them to receive goods. In 2023 and 2024, the companies received what is known as Validated End User (VEU) status in order to continue the trade. A company with VEU status is able to receive designated goods from a US company without the supplier obtaining multiple export licenses to ship to them. VEU status enables entities to receive US-controlled products and technologies 'more easily, quickly and reliably', as the Commerce Department website puts it. The VEU authorisations come with conditions, a source familiar with the matter said, including prohibitions on certain equipment and reporting requirements. 'Chipmakers will still be able to operate in China,' a Commerce Department spokesperson said in a statement when asked about the possible revocations. 'The new enforcement mechanisms on chips mirror licensing requirements that apply to other semiconductor companies that export to China and ensure the United States has an equal and reciprocal process.' Industry sources said that if it became more difficult for US semiconductor equipment companies to ship to foreign multinationals, it would only help domestic Chinese competitors. 'It's a gift,' one said. REUTERS
Straits Times
3 hours ago
- Straits Times
China's top HK official says security will ensure city's success
Director of the Hong Kong and Macau Affairs Office Xia Baolong's comments build on China's emphasis on national security in recent years PHOTO: AFP HONG KONG - China's top official for Hong Kong affairs said the city needs to prioritize national security to ensure prosperity. The China-imposed national security law helped Hong Kong maintain its status as an international financial hub, Mr Xia Baolong, director of the Hong Kong and Macau Affairs Office in Beijing, said on June 21 on his third trip to the semi-autonomous city in three years. 'Profound changes are occurring inside and outside Hong Kong. It is necessary to fully implement the One Country, Two Systems principle, guided by national security, to provide favourable safety protection for achieving better development of Hong Kong,' Mr Xia told a government forum marking the fifth anniversary of Beijing's implementation of the 2020 national security law, which silenced dissent in the once-freewheeling territory. His comments build on China's emphasis on national security in recent years, after massive pro-democracy protests roiled the former British colony in 2019. A continuing crackdown on perceived threats and the introduction of supporting legislation has stifled political dissent and led to the imprisonment of dozens of former activists. Earlier this month, Beijing's national security office in the city carried out its first known joint operation with local police to investigate a case of alleged foreign collusion. In the same week, authorities invoked a security law to ban a Taiwanese-made video game they accused of advocating for overthrowing the government. Mr Xia's speech at the forum represents the most public appearance he has made during his five-day trip that began o n June 18 , which has included meetings with political and business leaders. He also held discussions with university presidents earlier in the week, in a move seen as reinforcing Beijing's vision for Hong Kong as an innovation and talent hub. Appointed as Beijing's top man in Hong Kong in 2020, Mr Xia's tenure has seen growing integration between the Asian financial hub with the rest of China. He has urged the city to accelerate the development of its so-called Northern Metropolis, a sprawling area bordering the mainland city of Shenzhen. Mr Xia's visit comes as Hong Kong grapples with economic headwinds, buffeted by a slowing Chinese economy and a prolonged property slump. The city is also caught in the crossfire of the US-China trade war, with tariffs imposed by the Trump administration now applying to Hong Kong-made goods, further blurring the lines between the city and mainland China. Still, some observers argue Hong Kong could paradoxically gain from the deteriorating US-China relationship. Having declared the city 'over' in February 2024 , former Morgan Stanley Asia chairman Stephen Roach said recently that the territory may benefit because of its unique position as China's most important window to international finance. BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
