Despite receiving a one-year exemption to receive semiconductor equipment from U.S.-based vendors, SK Hynix officially said it is considering selling its Chinese fabs due to the ongoing semiconductor arms race.
The Korean memory giant also revealed it will reduce production volume and cut its 2023 capital expenditure by more than 50% year-on-year due to oversupply in the memory market.
In SK Hynix’s third quarter earnings conference, the company officially stated it was considering selling its Chinese fabs if the semiconductor arms race makes operations inside China too difficult to continue. It may also move equipment out of those fabs and into South Korea as a contingency plan or outright sell the equipment and fab depending on the circumstances.
Taking its toll
U.S. restrictions on selling equipment and other semiconductor technologies to China is taking its toll on companies operating inside the country. Specifically, SK Hynix, Samsung and foundry leader Taiwan Semiconductor Manufacturing Co. (TSMC) last week reportedly were considering abandoning their fabs in China due to the inability to receive support from U.S.-based firms.
A modern-day arms race for semiconductors has emerged as the U.S. continues to restrict exports of technology to China to quell the country’s advancement in the chip space. Previously, the U.S. Department of Commerce (USDOC) placed restrictions on wide band gap chips, electronic computer-aided design (ECAD) software and pressure gain combustion (PGC) technology in September.
This comes after restrictions were issued to various Chinese companies to restrict sales from U.S.-based vendors specifically networking equipment and smartphone vendor Huawei and China’s largest foundry Semiconductor Manufacturing International Corp (SMIC).
Additionally, the U.S. has been in contact with multiple equipment vendors, including extreme ultraviolet (EUV) lithography maker ASML, to restrict sales of the equipment to Chinese semiconductor manufacturers.
