Industry insiders said that the US's tightening restrictions will not immediately force the relevant chip factories to close, but they may find it more difficult to operate effectively over time.
US officials are planning to revoke technology exemptions for chip manufacturers operating in China. This potential policy change is part of the Trump administration's measures to restrict the flow of key US technology to China. If implemented, this move may cause major diplomatic and economic disruptions, as the US and China have just established a trade truce in London.
According to media reports, Jeffrey Kessler, head of the US Department of Commerce's export control department, has notified major semiconductor manufacturers including TSMC, Samsung Electronics and SK Hynix that he intends to cancel the current blanket exemption that allows these companies to ship US chip manufacturing equipment to their factories in China without applying for separate licenses each time. Currently, the three companies enjoy a blanket exemption that allows them to ship US chip manufacturing equipment to their factories in China without applying for separate licenses each time.
China's Ministry of Commerce recently talked about rare earth exports again, saying that it will continue to accelerate the review of rare earth-related export license applications in accordance with laws and regulations, and mentioned that a certain number of compliant applications have been approved.
White House officials said that this action does not represent a new trade escalation, but rather makes the licensing system for chip equipment similar to China's existing rare earth material licensing system. They said that the United States and China continue to make progress in completing the London agreement and trade negotiations.
Chinese customs data showed that China's semiconductor imports reached US$412 billion in 2024, a year-on-year increase of 10%. A spokesman for the US Department of Commerce said: "Chip manufacturers can still operate in China. The new chip enforcement mechanism is the same as the licensing requirements applicable to other semiconductor companies exporting to China, and ensures that the United States enjoys an equal and reciprocal process."
Industry insiders said that the US's tightening restrictions will not force these factories to close immediately, but they may find it more difficult to operate effectively over time. This will disrupt the global industry, and companies are already busy dealing with other issues caused by the Sino-US trade war.
Chip manufacturers may seek licenses issued by the US government on a case-by-case basis to supply their Chinese factories, while seeking to replace US equipment with alternative equipment from Japan and Europe. Participants in the discussion pointed out that the revocation of the exemption is not a foregone conclusion.
The semiconductor equipment sector is particularly sensitive to changes in Sino-US trade policies because many companies rely on the Chinese market for a significant portion of their revenue. TSMC's 2024 annual report for shareholders' meetings recently showed significant differences in the operating conditions of its factories in different regions. Media reports said that TSMC's new plant in Arizona, USA, lost about 3.2 billion yuan last year, while the Nanjing plant in mainland China made a profit of about 5.8 billion yuan last year, and the gap between the two was quite large.
Lam Research, a major semiconductor manufacturing equipment manufacturer, reported its third-quarter financial report for fiscal year 2025, showing that Lam Research's revenue for the quarter reached US$4.72 billion, higher than analysts' estimates of US$4.65 billion. Among them, Lam Research's system revenue (including new-generation advanced equipment sold in thin film deposition, etching, cleaning and other wafer manufacturing markets) was US$3.04 billion. Wall Street analysts believe that Lam Research's third-quarter revenue performance was better than expected, mainly due to increased shipments to Taiwan, China, while shipments to mainland China continued to be strong. In terms of revenue share, mainland China accounts for 31%, Taiwan accounts for 24%, South Korea accounts for 24%, Japan accounts for 10%, the United States accounts for 4%, Southeast Asia accounts for 4%, and Europe accounts for 3%.
Samsung's Chinese factories are crucial to Samsung's global supply chain. In 2024, Samsung's semiconductor business revenue climbed to US$66.5 billion, with a year-on-year increase of 62.5% and a market share of 10.6%, thanks to the recovery of memory chip prices. It successfully surpassed its old rival Intel and regained the top spot in global semiconductor revenue. In Samsung's strategic layout and market strategy adjustment, the business map of the Chinese market is crucial. Samsung's NAND Flash factory in Xi'an, China, as its largest overseas memory chip production base, accounts for 30% to 40% of Samsung's overall NAND production and is the world's single highest-capacity NAND flash factory. In 2024, the factory's sales increased by 28.5% year-on-year to 11 trillion won, and its operating profit reached 1.2 trillion won, becoming an important engine for Samsung's revenue growth.
It is reported that relevant companies have informed their respective governments that they hope officials will come forward to assist in lobbying against US policies.