Could US Export Controls Backfire? Exclusive: Samsung and SK Hynix Test Chinese Semiconductor Equipment to Avoid US 'Kill Switch'

Reuters reported exclusively on the 5th that, in response to the risk of further tightening of US semiconductor export controls, South Korea's memory giants Samsung Electronics and SK Hynix are testing chip manufacturing equipment produced by China's leading equipment manufacturer, Advanced Micro-Fabrication Equipment Inc. China (AMEC), as a contingency plan should Washington escalate its anti-China policies. While the US chip controls are not directly aimed at South Korea, the country's semiconductor firms operate factories in China, meaning Washington's measures could inadvertently affect them. Three sources familiar with the matter told Reuters that around two years ago, amid US uncertainty over whether to continue allowing Korean firms to ship US-made semiconductor equipment to their Chinese plants, Samsung and SK Hynix began evaluating AMEC's etching equipment. Reuters noted that while the Korean evaluation has not yet led to large-scale procurement decisions, it represents a rare opportunity for AMEC—headquartered in Shanghai—to gain validation from top global chipmakers. This industry move underscores the paradox of Washington's tech bans: restrictions intended to curb Beijing's semiconductor ambitions are instead opening doors for Chinese domestic equipment suppliers into foreign-owned fabs. However, Samsung Electronics has denied the report, stating officially that it is not testing AMEC equipment at its Chinese plants and has 'never considered' doing so; SK Hynix declined to comment. AMEC and the US Department of Commerce's Bureau of Industry and Security (BIS), which enforces export controls, did not respond to requests for comment. Concerned about expanding export bans, Korean firms prepare 'Plan B' In 2023, the US Department of Commerce placed Samsung and SK Hynix's Chinese facilities on the 'Validated End-User' (VEU) list, allowing them to import specific US-controlled equipment without individual licenses. However, Washington revoked this VEU authorization in 2025, switching to an annual approval system. While Samsung and Hynix can still ship equipment to their Chinese plants, they now face annual uncertainty over potential US blacklisting. Sources said Samsung and Hynix fear future US restrictions could expand from 'new equipment imports' to 'maintenance, repair, and parts replacement for already installed equipment,' leading both companies to position Chinese equipment suppliers as 'backup solutions.' However, the Korean firms aim only to maintain and upgrade existing production lines, not to expand capacity in China using Chinese-made equipment. Reuters noted that Samsung operates a NAND flash memory plant in Xi'an; SK Hynix owns a NAND facility in Dalian and a DRAM memory plant in Wuxi. These Chinese facilities heavily rely on etching equipment from US suppliers, including Applied Materials and Lam Research. Dan Hutcheson, Vice Chairman of research firm TechInsights, analyzed that while Chinese equipment makers still lag behind foreign giants in advanced lithography and some inspection systems, they have significantly narrowed the gap in etching, deposition, cleaning, and chemical mechanical planarization (CMP). Hutcheson noted that Chinese equipment is typically 20% to 30% cheaper than equivalent products from established foreign suppliers. Sources added that AMEC's equipment has already been adopted by China's domestic memory leader, Yangtze Memory Technologies (YMTC), leading Samsung and SK Hynix to believe some Chinese systems are mature enough to warrant testing. Reuters pointed out that the rise of Chinese equipment makers could long-term challenge US firms like Applied Materials, Lam Research, KLA, and dominant Japanese and European competitors in wafer fabrication. China remains a core market for these Western giants—Applied Materials, for example, generated $8.53 billion in revenue from China in fiscal 2025, accounting for 30% of its total sales. Deutsche Bank estimates that under the impetus of US export controls, four Chinese equipment makers—NAURA Technology, AMEC, Piotech, and ACM Research—will each surpass $1 billion in revenue by 2026. These four are expected to capture 25% to 30% of China's semiconductor equipment market (projected at $28 billion) this year; excluding lithography and metrology equipment, domestic suppliers' market share could approach 40%. However, Reuters also highlighted challenges facing Chinese semiconductor manufacturing equipment: complex certification processes, less robust service networks than Western giants, and potential political pressure from Washington. Combined with security and intellectual property risks, it remains uncertain whether Korean chipmakers will actually adopt Chinese equipment.