BIS to Revoke VEU Status for China Facilities Owned by Samsung, SK Hynix
The Bureau of Industry and Security is removing Samsung China Semiconductor Co., SK hynix Semiconductor (China) and a third SK hynix-owned semiconductor facility in Dalian from the agency’s Validated End-User List, which will make them ineligible for a general authorization that had allowed them to receive certain U.S.-controlled technology. BIS called the VEU program a “loophole” because it allows certain foreign firms to export chip manufacturing equipment and technology to China without a specific license. The final rule takes effect Dec. 31.
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BIS said it plans to approve export license applications to allow former VEU participants to operate their existing fabs in China, but it “does not intend to grant licenses to expand capacity or upgrade technology at fabs in China.”
The agency’s Federal Register notice, released Aug. 29, said one of the factories being removed from the VEU List is Intel Semiconductor (Dalian). SK hynix bought that factory from Intel earlier this year, according to Intel’s March SEC filing. BIS didn’t immediately respond to a request for comment about whether it plans to issue a clarification.