Semiconductor companies Samsung Electronics and SK Hynix have secured the US government’s clearance to expand chip manufacturing operations in China, reported Bloomberg.

In a statement, South Korea’s Presidential Office said the two companies have effectively been granted indefinite permission on larger restrictions prohibiting the sale of advanced chipmaking equipment to China.

With the concession, the South Korean companies will be able to import advanced US equipment that would otherwise be banned from entering China.

It will allow Samsung and Hynix to sustain and expand their Chinese chip manufacturing operations and compete in the largest chip market over the long run.

Speaking to reporters, South Korea Presidential Economic Advisor Choi Sang-Mok said: “The US government’s decision means that the biggest trade issue for Korean semiconductor companies has been resolved.

“Korean chip companies are key suppliers and equipment consumers, accounting for 60.5% of the world’s memory output, and their stable production is directly linked to the stability of the global semiconductor supply chain.”

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By GlobalData

In 2022, when Washington released its semiconductor export restrictions, Hynix raised concerns that in the worst-case scenario, constraints might force the closure or sale of its key facility in China.

It has NAND plants in the northern city of Dalian as well as a DRAM factory in Wuxi, central China.

Samsung also makes NAND devices in Xi’an in central China.

The extensive 2022 curbs targeted the core of Beijing’s technological aspirations and raised concerns about foreign companies’ operations in China, notably Hynix and its larger rival Samsung.

At the time, both were granted a one-year waiver allowing them to import the necessary equipment, but since then they have been dealing with the question of whether that waiver will be extended.

“We will continue to work closely with all relevant governments to maintain a stable supply chain for the global semiconductor industry,” a Samsung Electronics representative was quoted by the publication as saying.

Hynix also welcomed the extension of the waiver.

The news comes as the lawmakers in Washington push to restrict US companies from working on RISC-V open-source chip technology often used in China.