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US May Target Samsung, Hynix, and TSMC Operations in China by Revoking Trade Authorizations

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The U.S. Department of Commerce is considering revoking authorizations granted in recent years to major chipmakers Samsung, SK Hynix, and TSMC that allow them to receive U.S. goods and technology at their manufacturing plants in China, sources familiar with the matter said. This potential move would complicate operations for these foreign semiconductor firms in China, where they produce chips used across many industries.

While the likelihood of the U.S. actually withdrawing these authorizations remains uncertain, officials view the tactic as a contingency if the current trade truce between the U.S. and China deteriorates. A White House official emphasized that the U.S. is “just laying the groundwork” and expressed confidence the trade agreement would continue, including the agreed supply of rare earth minerals from China. The official clarified that “there is currently no intention of deploying this tactic,” but it remains a tool in case bilateral relations worsen.

Following early reports, shares of U.S. semiconductor equipment suppliers that serve Chinese plants dropped: KLA Corp fell 2.4%, Lam Research declined 1.9%, and Applied Materials sank 2%. Conversely, shares of Micron Technology, a key competitor to Samsung and SK Hynix in memory chips, rose 1.5%.

TSMC declined to comment, while Samsung and SK Hynix did not respond to requests for comment. Lam Research, KLA, and Applied Materials also did not immediately respond.

Background: In October 2022, the U.S. imposed broad restrictions on chipmaking equipment exports to China but provided foreign firms like Samsung and SK Hynix with letters authorizing shipments. In 2023 and 2024, these companies received “Validated End User” (VEU) status, which allows them to obtain U.S.-controlled products more quickly and reliably without needing multiple export licenses. However, VEU status comes with conditions such as equipment prohibitions and reporting requirements.

A Commerce Department spokesperson said chipmakers would still be able to operate in China if the authorizations are revoked. The enforcement mechanisms would align with licensing rules for other semiconductor firms exporting to China, ensuring the U.S. applies an equal and reciprocal approach.

Industry insiders warn that stricter U.S. controls could unintentionally benefit Chinese domestic competitors by making it harder for foreign companies to receive equipment, calling such a move “a gift” to China’s semiconductor industry.

Taiwan Adds Huawei and SMIC to Strategic Export Control List Amid Security Concerns

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Taiwan has placed China’s tech giants Huawei Technologies and Semiconductor Manufacturing International Corp (SMIC) on its export control list, requiring Taiwanese firms to obtain government approval before exporting any products to these companies.

The additions were part of a recent update to the Ministry of Economic Affairs’ trade administration strategic high-tech commodities entity list, announced on June 10. Alongside Huawei and SMIC, the update included 601 entities from countries such as Russia, Pakistan, Iran, Myanmar, and China, including groups like the Taliban and al Qaeda.

Taiwan’s trade administration stated the review and update were driven by “prevention of arms proliferation and other national security considerations.” It urged manufacturers to comply with export control regulations, fulfill verification obligations, and carefully assess transaction risks.

Taiwan is home to TSMC, the world’s largest contract chipmaker and a key supplier to AI leader Nvidia. Both Huawei and SMIC are pivotal to China’s ambitions in chips and artificial intelligence and have been striving to close the technology gap.

Taiwan already enforces strict chip export controls on Taiwanese companies that manufacture domestically or supply Chinese firms, reflecting ongoing tensions between Taipei and Beijing, which claims Taiwan as its territory.

Huawei is also subject to U.S. export restrictions barring access to American and foreign-made goods involving U.S. technology, including chips manufactured by TSMC. Last year, TSMC was ordered by the U.S. Commerce Department to halt shipments of certain chips to Chinese customers, including Huawei and Sophgo, a Chinese chip designer linked to Huawei’s AI processor.

Taiwan’s government has repeatedly pledged to combat Chinese efforts to steal technology and attract Taiwanese chip talent, emphasizing the strategic importance of the semiconductor sector.

SMIC, China’s largest chipmaker, continues to invest heavily to expand capacity amid U.S. export curbs, aiming to boost China’s domestic semiconductor capabilities.

AMD Warns of $1.5 Billion Revenue Hit from U.S. China Chip Export Curbs, But AI Demand Remains Strong

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Advanced Micro Devices (AMD) warned on Tuesday that new U.S. restrictions on AI chip exports to China will cost the company $1.5 billion in revenue for 2025, as Washington intensifies efforts to limit China’s access to advanced technology. Despite the projected hit, AMD’s second-quarter revenue forecast surpassed Wall Street expectations, buoyed by early chip purchases from customers bracing for trade disruptions.

The Biden and Trump administrations have both ramped up controls on exports of high-performance chips to China, citing national security risks related to AI capabilities. These measures now require chipmakers like AMD and Nvidia to obtain export licenses, effectively slowing or blocking shipments of advanced processors.

CEO Lisa Su said most of the export-related impact will be felt in Q2 and Q3, but expressed confidence in broader business strength. “It’s certainly a headwind, but one which we think is well contained,” Su said, noting that AI chip revenue in AMD’s data center segment is expected to grow by “strong double digits” this year.

China represents about 25% of AMD’s total revenue, and the export curbs are expected to shave nearly 5% off 2025 revenue projections, which currently sit at $31.03 billion, per LSEG data.

In Q1, AMD reported:

  • Total revenue of $7.44 billion, up 36% year-over-year, beating the estimate of $7.25 billion

  • Adjusted earnings of 96 cents per share, 2 cents above consensus

  • Data center revenue surged 57% to $3.7 billion, above the $3.62 billion estimate

For Q2, AMD expects revenue of $7.4 billion ± $300 million, also ahead of forecasts. However, the company is still absorbing an $800 million charge due to April’s newly enacted tariffs.

CFO Jean Hu confirmed the $1.5 billion forecasted revenue loss is tied directly to the latest April export controls. Analysts suggest the current surge in orders reflects “pre-buying behavior” from large cloud clients like Microsoft and Meta, who are stockpiling chips ahead of licensing uncertainty.

“Once those safety-stock closets are full, Q3 could feel like the morning after a Red Bull binge,”
warned Michael Schulman, CIO at Running Point Capital.

Meanwhile, rivals Marvell Technology and Super Micro both disappointed investors, citing economic uncertainty and reduced AI-related optimism. Their shares fell 4.5% and 5%, respectively, in after-hours trading.

AMD’s solid results highlight its growing role in powering AI infrastructure for hyperscalers, even as trade tensions and tariffs loom over the semiconductor industry.