TAIPEI (Taiwan News) — The US Commerce Department is considering pulling trade authorizations that allow TSMC, Samsung, and SK Hynix, to receive US chipmaking gear in China, Reuters reported Saturday.
While no final decision has been made, the option is under review as part of contingency planning in case US-China trade tensions escalate. A White House official said there is currently “no intention of deploying this tactic,” but described it as a tool the administration wants in its toolbox.
The licenses, known as Validated End User, or VEU, authorizations, allow chipmakers to receive certain US-controlled goods without individual export licenses. These permissions allow Samsung and Hynix to operate in China even under sweeping US tech restrictions imposed since 2022.
The potential revocation could disrupt chip production for a range of industries, as all three companies manufacture semiconductors widely used in everything from consumer electronics to servers. Industry sources warned it would also complicate supply chains and potentially benefit Chinese rivals.
TSMC declined to comment on the report, while Samsung, SK Hynix, and US chip equipment makers Lam Research and Applied Materials did not respond to requests.
The Commerce Department granted VEU status to Samsung and Hynix in 2023 and last year following its 2022 restrictions on US chip equipment exports to China. These licenses allowed the companies to receive products with fewer regulatory delays, helping them maintain supply chains.
However, VEU authorizations include strict conditions, such as bans on certain tools and mandatory reporting requirements, according to a person familiar with the matter. Any changes to these privileges could impact how reliably the firms operate in China.
The Commerce Department said chipmakers would still be able to run their Chinese plants even if authorizations were withdrawn. It described the new enforcement mechanisms as similar to licensing requirements for other chip firms and aimed at creating a level playing field.
