By Greg Gao

(JW Insights) Oct 10 -- South Korean firms Samsung Electronics and SK Hynix will be allowed to supply US chip equipment to their China factories indefinitely without separate US approvals, South Korea's presidential office announced on October 9.

"Uncertainties about South Korean semiconductor firms' operations and investments in China have been greatly eased; they will be able to calmly seek long-term global management strategies," said a South Korean official.

The US government recently announced that it intends to designate the semiconductor factories of Samsung Electronics and SK Hynix in China as "Validated End-Users" (VEUs) through the Export Control Administration and the Economic and Security Talks channel of the National Security Council (NSC).

VEU is a comprehensive licensing method that allows the export of specified items to approved companies without the need for individual licenses for each case. Once included in VEU, the implementation of US export controls is effectively suspended indefinitely.

SK Hynix welcomed the decision by the US government to extend the export control regulation exemption, believing that this decision would contribute to the stability of the global semiconductor supply chain.

The US has already notified Samsung and SK Hynix of the decision, indicating that it is in effect, the South Korean official said.

Samsung Electronics makes about 40% of its NAND flash chips at its plant in Xi’an, China, while SK Hynix makes about 40% of its DRAM chips in Wuxi and 20% of its NAND flash chips in Dalian, reported Reuters.

The companies together controlled nearly 70% of the global DRAM market and 50% of the NAND flash market as of end-June, data from TrendForce showed.