Shares of Samsung Electronics and SK Hynix slid on Monday after the Trump administration decided to make it harder for the world’s largest memory chipmakers to ship critical equipment to their giant Chinese operations.
The surprise ruling deals a potential blow to their production in the world’s largest semiconductor market. While both South Korean companies have memory plants in their home market, China accounts for a major slice of their global output.
Samsung sank more than 2 per cent, while SK Hynix stock was more than 4 per cent lower in morning trading.
The pair had operated in China under regulations that allow them to import chipmaking equipment without applying for a new licence each time.
They now have 120 days until the waiver expires, according to an announcement in the US Federal Register. Companies can seek licences to continue operations.
The Trump administration’s move would revise what is known as the validated end user, or VEU, rules, handicapping the ability to make chips in China and jeopardising Beijing’s access to certain technologies.
