Analyst(s): Ray Wang
Publication Date: July 1, 2025
The U.S. government is reportedly considering revoking export control waivers for major chipmakers operating in China, including SK Hynix, Samsung, and TSMC, potentially requiring license approvals for future equipment imports and technology upgrades. This policy shift would most significantly impact SK Hynix and Samsung, whose Chinese fabs contribute a sizable share of their DRAM and NAND production, raising risks to technology migration and capacity expansion. TSMC appears less exposed due to its limited operations and lower revenue dependence on China, with most of its advanced node production located elsewhere. The move could also affect U.S. semiconductor equipment vendors such as Lam Research, Applied Materials, and KLA, who may see a short-term order spike but face long-term demand risks if China-based expansions stall.
Key Points:
- SK Hynix faces the most substantial risk as its Wuxi fab facility produces approximately 40% of the company’s DRAM, and the Dalian fab contributes 25% of NAND output. License delays or denial could disrupt node migration to 1a nm in DRAM and limit production capacity in DRAM and NAND in China.
- Samsung’s Xi’an fab contributes an estimated 40–50% of its total NAND output and ~10% of global NAND supply. The restriction may delay the firm’s ongoing technology transition for its NAND products from V6 (128-layer) to V8 (236-layer) and V9 (286-layer) NAND, as well as the future expansion of production capacity.
- U.S. semiconductor equipment vendors such as Applied Materials, Lam Research, and KLA rely on orders from leading memory players operating in China. Any delays or restrictions due to the new rule could drive near-term sales and shipments due to potential stockpile efforts by the customer, but undermine companies’ sales in the medium and long run.
Overview:
Figure 1: Breakdown of SK Hynix’s Manufacturing Footprint in China
Figure 2: Samsung’s Manufacturing Footprint in China – Xi’an Fab
U.S. Considers Revoking Export Waivers for Key Chipmakers
The U.S. government is reportedly weighing the revocation of Validated End User (VEU) waivers granted to TSMC, Samsung, and SK Hynix. These waivers, issued in response to the 2022 export control measures, allow the chipmakers to operate and upgrade Chinese fabs using U.S. semiconductor equipment without requiring additional licenses. Under the proposed changes, companies would need to obtain case-by-case approvals for equipment imports and technology upgrades, adding regulatory uncertainty to their China operations.
SK Hynix: Most Exposed Among the Three
SK Hynix faces the highest risk under the potential policy shift. Its Wuxi fab, responsible for approximately 40% of the company’s DRAM production, is in the process of migrating to the 1a nm node—a transition that would be jeopardized by restricted access to advanced U.S. tools. Additionally, the company’s Dalian fab, contributing 25% of SK Hynix’s NAND output, would also be affected as future upgrades and expansions would require new licensing. The risk includes delays or even outright denial of equipment imports, potentially disrupting its technology roadmap. However, Hynix may partially offset the impact through its Korean fabs and upcoming M15X and Yongin facilities, which are under construction.
Samsung’s Xi’an Fab Faces Technology Migration Risks
Samsung’s NAND operations in China are centered at its Xi’an fab, which produces over 40% of its total NAND output and ~10% of global supply. The fab is currently undergoing a transition from V6 (128-layer) to V8 (236-layer) and V9 (286-layer) NAND. These migrations could be hampered by new licensing requirements. While Samsung’s advanced memory production is mostly based in South Korea, disruptions in Xi’an could still impact global supply, particularly if the V9 migration is impeded.
TSMC’s China Exposure Is Minimal
In contrast, TSMC appears relatively insulated. The company’s Chinese fabs—Fab 16 (12 nm to 28 nm nodes) and Fab 10 (mature 1.3 μm to 1.8 μm nodes)—generated just 3.4% of its total revenue in 2024. These facilities primarily serve mature-node demand for industrial and automotive clients in China, and TSMC has not announced major technology upgrades for them. With over 70% of its revenue tied to <7 nm nodes fabricated in Taiwan and the U.S., TSMC’s exposure to the new rule is limited and largely manageable.
Equipment Vendors Face Mixed Outlook
U.S. front-end semiconductor equipment vendors—including Applied Materials, Lam Research, and KLA—could see near-term upside as chipmakers rush to stockpile tools ahead of any rule implementation. However, over the medium to long term, if chipmakers’ Chinese fabs face long-term restrictions in upgrading or expanding capacity, these vendors risk facing a reduced source of demand. Monitoring import patterns and order flow will be critical to assessing the full impact.
Conclusion
The potential revocation of U.S. export waivers for TSMC, Samsung, and SK Hynix introduces heightened regulatory uncertainty for global chipmakers operating in China, particularly those with significant memory production capacity in the region. SK Hynix and Samsung face the greatest risk, as key DRAM and NAND facilities in Wuxi, Dalian, and Xi’an are central to their global output and are currently undergoing critical technology migrations. While TSMC appears less exposed due to its limited advanced-node activity in China, all affected firms must now contend with the possibility of delayed equipment imports and constrained upgrade paths if not an outright prohibition. U.S. semiconductor equipment vendors may see short-term order surges as customers prepare for new rules, but risk diminished long-term growth if Chinese expansion stalls. Ultimately, the situation underscores the growing strategic need for supply chain diversification, operational flexibility, and continuous reassessment of geopolitical risk across the semiconductor industry.
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Author Information
Ray Wang is the Research Director for Semiconductors, Supply Chain, and Emerging Technology at Futurum. His coverage focuses on the global semiconductor industry and frontier technologies. He also advises clients on global compute distribution, deployment, and supply chain. In addition to his main coverage and expertise, Wang also specializes in global technology policy, supply chain dynamics, and U.S.-China relations.
He has been quoted or interviewed regularly by leading media outlets across the globe, including CNBC, CNN, MarketWatch, Nikkei Asia, South China Morning Post, Business Insider, Science, Al Jazeera, Fast Company, and TaiwanPlus.
Prior to joining Futurum, Wang worked as an independent semiconductor and technology analyst, advising technology firms and institutional investors on industry development, regulations, and geopolitics. He also held positions at leading consulting firms and think tanks in Washington, D.C., including DGA–Albright Stonebridge Group, the Center for Strategic and International Studies (CSIS), and the Carnegie Endowment for International Peace.
