In a press release to the South China Morning Publish in a while Wednesday, SK Hynix appeared to stroll again Noh’s feedback, saying the corporate had by no means talked about any plans to stop operations or shut down its services in China.
“SK Hynix will do its finest to make sure secure operation of its services in China,” the corporate stated.
Earlier this month, the US commerce division unveiled sweeping updates to its laws, fortifying export controls on superior semiconductors and sure chip-making instruments for China-based entities.
Wafer fabs in China owned by international companies, together with SK Hynix’s 300-millimetre DRAM wafer fabrication plant, have been granted a one-year grace interval, throughout which they will proceed to import gear from the US. Samsung Electronics and Taiwan Semiconductor Manufacturing Co have additionally acquired exemptions for his or her fabs in China.
Nonetheless, the US restrictions have solid a shadow over the long-term prospects of those companies’ Chinese language operations as a result of they’d finally lose entry to upgraded variations of key applied sciences and gear, which might damage their competitiveness.
SK Hynix was pressured to halt a plan to improve its Wuxi facility final 12 months as a result of US officers didn’t need superior gear to enter China, Reuters reported on the time.
Analysts stated South Korean chip giants like SK Hynix and Samsung needed to rethink the prices and advantages of working in China beneath the brand new US laws.
These corporations have “no selection however to evaluate the dangers of their crops in China”, stated Gary Ng, senior economist for Asia-Pacific at funding financial institution Natixis.
“It’s doable to see extra companies promoting or relocating their belongings out of China to mitigate such dangers,” Ng stated. “Given the US aim is to freeze China’s development, there could also be some flexibility in preserving the prevailing fabs finally, however additional growth will likely be more and more tough.”
The one-year grace interval offers Samsung and SK Hynix some “respiration house” solely within the quick time period, wrote Mark Li, a senior analyst at asset administration firm Bernstein, in a current word.
“In the long term we do imagine it’s america’ aim to induce, if not compel, Samsung and SK Hynix to scale back, if not decouple, their manufacturing operations from China,” Li stated.
A closure of SK Hynix’s Chinese language plant would deal a heavy blow to China’s place within the international semiconductor provide chain, in addition to Beijing’s hope of wooing South Korean companies to mitigate the hurt brought on by US sanctions.
The Wuxi manufacturing unit is presently the most important international funding undertaking in Jiangsu. It’s important to the worldwide electronics business, as it’s accountable for about half of SK Hynix’s DRAM chip output and roughly 15 per cent of the world’s manufacturing.
The Wuxi authorities constructed a complete industrial property with SK Hynix, which amounted to over US$20 billion in investments over 15 years. The corporate is so essential to the native economic system {that a} hospital and first faculty have been named after SK Hynix, in accordance with the federal government.
This week, SK Hynix reported sluggish third-quarter gross sales of 10.98 trillion gained (US$7.7 billion), down 20.5 per cent from the earlier quarter, owing to weak demand for DRAM and NAND merchandise amid the worsening macroeconomic setting worldwide.
The corporate stated it might minimize funding in 2023 by greater than half from final 12 months.