SK Hynix, Samsung shares fall after US revokes China chip exports

Shares in SK Hynix and Samsung Electronics fell on September 1, after the US revoked authorizations that allowed the companies to import US semiconductor manufacturing equipment for their factories in China.

The new rule takes effect in 120 days and will make it harder for the South Korean firms to upgrade their Chinese plants.

SK Hynix, which bases 30% to 40% of its DRAM and NAND chip production in China, saw its shares drop 4.8%.

Samsung, which makes about a third of its NAND chips in China but manufactures all DRAM chips elsewhere, lost 3% in share value.

The US move follows a meeting between US President Donald Trump and South Korea’s President Lee Jae Myung, but a South Korean trade ministry official said the export control decision is separate from the talks.

Analysts say the short-term impact may be limited as both companies focus new production in South Korea, though the policy could benefit competitors with less exposure to China.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Export controls are creating cascading economic effects beyond their intended targets

The revocation of Samsung and SK Hynix’s equipment import authorizations represents an escalation of US export controls that began with sweeping restrictions in 2022.

A Federal Reserve Bank of New York study found that these export controls led to significant revenue drops for affected US firms, demonstrating how trade restrictions create broad economic ripple effects 1.

The stakes are particularly high given that China accounted for 31.4% of global semiconductor purchases in 2022, meaning restrictions on this market fundamentally reshape industry dynamics 1.

Analysts have warned that the ongoing semiconductor trade tensions could lead to a 34% contraction of the global semiconductor market by 2026 if current trends continue 2.

The 120-day implementation timeline gives companies a brief window to adjust, but these controls are expected to expand rather than contract, given the US strategic pivot to protect critical technologies from potential military applications 3.

2️⃣ Market disruptions often benefit companies with alternative positioning

While Samsung and SK Hynix face significant constraints—with SK Hynix producing 30-40% of its DRAM and NAND in China—competitor Micron appears positioned to capitalize on their challenges.