Samsung and SK Hynix Hit by US License Revocations in China

The US-China tech standoff has tightened its grip on the global semiconductor industry, and this time Samsung and SK Hynix are directly in the crossfire. The US Commerce Department has revoked the companies’ licenses to bring in new American-made chipmaking equipment for their Chinese factories.

While existing facilities can continue to run, any attempts to upgrade or replace broken machinery are effectively blocked.

Both Samsung and SK Hynix operate multiple plants worldwide, but their Chinese facilities play a special role. Samsung, for example, produces older, so-called legacy chips there, while reserving the production of cutting-edge semiconductors for South Korea and the United States. These legacy chips are still vital for industries from smartphones to cars. Without the ability to repair or replace gear, the long-term sustainability of these factories is now uncertain.

Washington’s decision reflects a broader strategy: restricting China’s access to advanced semiconductor technology. For years, the US has viewed microchips as a critical front in the geopolitical competition, and curbing China’s ability to develop modern chips is central to that effort. Supporters of the move argue it helps prevent China from closing the technological gap, while critics say the US is overreaching into decisions that affect companies’ global operations and sovereignty.

The ruling doesn’t just strike at corporate logistics – it highlights how intertwined global supply chains have become. Companies like Samsung and SK Hynix must balance between their reliance on American technology licenses and the vast manufacturing capacity in China. The revocation is less about shutting down factories today and more about reshaping the future of where chips get made.

For Samsung’s chip division and its South Korean rival SK Hynix, the development adds another obstacle in a market already strained by high demand, international politics, and constant innovation cycles. The future of chip production will depend not just on engineering, but also on diplomacy.