The US government has approved annual export licences to allow Samsung Electronics and SK Hynix to ship chipmaking equipment to their China facilities throughout 2026. A Reuters report, citing people familiar with the decision, said the approvals came just before a long-standing waiver system expired, marking a shift to a more restrictive licensing framework for foreign-owned fabs in China. Under the new system, the US has formally moved to annual approvals for chipmaking tool exports into China, replacing the validated end-user status that Samsung, SK Hynix and TSMC previously enjoyed. The yearly licences must be renewed each calendar year, the Reuters report claimed.What is this waiver system between the US and ChinaThe expired waiver system validated end-user status and allowed qualifying factories in China to receive US-controlled semiconductor tools without seeking individual export licences for each shipment. Now, all shipments of US-origin manufacturing equipment require explicit authorisation from Washington to enter China.US officials had increasingly viewed the previous waiver system as overly permissive, according to one source cited by Reuters, prompting the transition to stricter annual oversight.These approvals are significant for Samsung and SK Hynix because they make most of their memory chips in China. Samsung has a big factory in Xi’an that makes NAND flash memory, while SK Hynix has two major factories, one in Wuxi making DRAM chips and another in Dalian making NAND chips. Together, these factories produce a considerable amount of the world’s memory chips. With memory chip prices going up due to high demand from AI data centres, keeping these factories running smoothly has become even more critical.The new annual licences let these companies keep their factories running and maintain their equipment, but do not allow them to expand or upgrade to the latest technology. US officials have made clear they want to stop China from getting advanced chip-making tools. Even before this change, the most advanced equipment (like EUV machines) was already banned.Switching to yearly approvals creates uncertainty for chipmakers. Each year, the US can change the rules or even deny approval completely, depending on political tensions and security concerns. Experts believe this stricter system will hurt sales for American equipment makers such as Applied Materials, Lam Research, and KLA, which sell machines these memory factories need.For 2026, Samsung and SK Hynix can keep bringing essential equipment into their China factories. But going forward, the US will watch these shipments much more closely, reviewing them every single year.
