U.S. plans to revoke waivers for allies’ chip plants in China: report

The U.S. is planning to revoke waivers used by global semiconductor makers to access American technology in China, as per a recent report by the Wall Street Journal.

The move is likely to affect companies like South Korea’s Samsung Electronics (OTCPK:SSNLF) and SK Hynix (OTCPK:HXSCF) as well as Taiwan Semiconductor Manufacturing (NYSE:TSM), who benefit from blanket waivers that permit them to export U.S. chip-making equipment to their Chinese factories without needing to obtain individual licenses for each shipment.

Jeffrey Kessler, head of the unit in charge of export controls at the Commerce Department, reportedly told the three companies this week that he wanted to cancel those waivers, calling the plan a part of President Donald Trump’s crackdown on the transfer of sensitive U.S. technology to China.

The move is not meant to be a new trade escalation but is aimed at aligning the licensing requirements for chip equipment with China’s system for rare-earth materials, the report said citing White House officials.

According to industry officials quoted by WSJ, Washington’s curbs may not lead to immediate factory shutdowns but could gradually hinder their ability to function efficiently.

In May, the U.S. and China agreed to a significant reduction in tariffs on each other’s goods for 90 days, calming the global market’s volatile run. Last week, officials from both countries agreed in principle on a framework intended to revive their trade truce and lift China’s export restrictions on rare earth elements. However, Washington’s latest measure could jeopardize the progress made by the two countries.