Zhong Guo Jing Ying Bao·2025-08-31 12:56Core Viewpoint - The Trump administration has decided to revoke the Validated End-User (VEU) authorization for Samsung Electronics and SK Hynix in China, aiming to further restrict China's access to advanced chip manufacturing technology, which may exacerbate global semiconductor supply chain tensions [1][2]. Group 1: Impact on Companies - Samsung China Semiconductor and SK Hynix Semiconductor (China) will no longer enjoy VEU exemptions, meaning they must apply for individual export licenses for each relevant transaction, which could hinder their operations in China [2][3]. - The revocation of VEU will lead to stricter scrutiny of semiconductor production at these companies' Chinese facilities, potentially affecting supply chains and capacity expansion [3]. - The Samsung Xi'an factory is one of the largest NAND flash production bases globally, while SK Hynix's Wuxi facility is its largest overseas production base for DRAM [2][3]. Group 2: Industry Implications - This policy change may result in capacity freezes, forced capital expenditure relocations, customer shifts, and supply chain reallocations for Samsung and SK Hynix in China [3]. - Domestic integrated circuit industry professionals believe that this move opens a window of opportunity for local storage manufacturers like Yangtze Memory Technologies and ChangXin Memory Technologies, providing them with clearer market gaps and growth opportunities [3][4]. - The urgency for domestic alternatives in equipment and materials is heightened, benefiting local companies such as Zhongwei Company, Northern Huachuang, and Tuojing Technology [3][4]. Group 3: Future Considerations - There is a 120-day buffer period for the policy change, during which further adjustments may occur, and the likelihood of production halts is considered low [5]. - Long-term, the U.S. strategy to limit China may backfire by harming the business interests of allies and accelerating the growth of non-U.S. ecosystems [5].