Samsung and SK Hynix Explore Chinese Chipmaking Equipment to Reduce Future U.S. Trade Risks
South Korean Chipmakers Explore Backup Technology OptionsSamsung Electronics and SK Hynix are reportedly evaluating semiconductor manufacturing equipment developed by Chinese supplier Advanced Micro-Fabrication Equipment (AMEC) as part of contingency planning for their operations in China.According to sources familiar with the matter, the two memory chip giants have been testing AMEC etching systems for nearly two years. The evaluations began as uncertainty grew over whether future U.S. export controls would continue allowing Western chipmaking equipment to be supplied and supported at foreign-owned semiconductor plants in China.Both companies, however, have denied conducting tests of AMEC equipment for use in their Chinese manufacturing facilities.Precaution Rather Than Immediate AdoptionPeople familiar with the discussions emphasized that the evaluations do not indicate plans for large-scale deployment of Chinese equipment. Instead, the testing is intended to provide an alternative option should future U.S. restrictions make it more difficult to service, repair or replace existing Western manufacturing tools.The strategy reflects growing concern among global semiconductor companies over the long-term impact of geopolitical tensions on supply chains and factory operations.U.S. Export Controls Continue to Shape Industry DecisionsThe United States has steadily tightened restrictions on semiconductor technology exports to China over the past several years.In 2023, Samsung and SK Hynix received "Validated End User" (VEU) status from the U.S. Commerce Department, allowing them to import certain controlled chipmaking equipment into their Chinese factories without obtaining individual licenses.That authorization was later withdrawn in 2025 before being replaced with an annual license permitting equipment imports during 2026.Despite the temporary approval, industry sources say both companies remain cautious about the possibility that future U.S. regulations could expand beyond new equipment and also restrict maintenance services or spare parts for machinery already installed at their Chinese plants.Chinese Suppliers Viewed as a Contingency PlanRather than expanding manufacturing capacity in China, Samsung and SK Hynix are reportedly evaluating Chinese suppliers as a backup solution to help maintain existing production lines if access to Western technology becomes more limited.Samsung operates a major NAND flash memory manufacturing facility in Xi'an, while SK Hynix runs NAND production in Dalian and a DRAM fabrication plant in Wuxi. These facilities currently rely heavily on etching systems supplied by leading American companies, including Applied Materials and Lam Research.Maintaining uninterrupted production remains a priority should geopolitical developments disrupt existing supply arrangements.Major Opportunity for China's Semiconductor Equipment IndustryFor AMEC and other Chinese semiconductor equipment manufacturers, securing approval from global leaders such as Samsung or SK Hynix would represent a major commercial milestone.Although Chinese suppliers continue to lag international competitors in advanced lithography and certain inspection technologies, they have made significant progress in several manufacturing processes, including etching, deposition, wafer cleaning and planarization.Their equipment has also become increasingly attractive because of its competitive pricing compared with Western alternatives.Geopolitical Tensions Drive New Industry DynamicsThe reported evaluations also illustrate an unintended consequence of ongoing U.S. technology restrictions.While Washington's export controls are intended to slow China's semiconductor advancement, they have simultaneously encouraged multinational chipmakers operating inside China to consider local suppliers as part of their long-term risk management strategies.Even without immediate deployment, the ongoing assessments could strengthen the credibility of Chinese semiconductor equipment makers and gradually expand their role in the global chip manufacturing ecosystem.OutlookNo decision has been made regarding wider adoption of AMEC's equipment, and both Samsung and SK Hynix continue to deny testing the technology for use in China. However, the reported evaluations underscore how geopolitical uncertainty is influencing procurement strategies across the semiconductor industry, with manufacturers increasingly seeking diversified supply options to safeguard production against future disruptions.