The Trump administration is weighing a consequential move that could significantly reshape the global semiconductor supply chain: revoking special U.S. export authorizations that currently allow chipmakers Samsung Electronics, SK Hynix, and TSMC to receive American semiconductor manufacturing equipment at their facilities in China.
According to people familiar with the matter, cited by Reuters, the U.S. Department of Commerce is actively reviewing whether to pull back the authorizations, granted in recent years, which allow the companies to bypass otherwise sweeping export controls imposed on China in October 2022. These measures, if enacted, would make it far more difficult for the three global chip giants to continue accessing advanced U.S.-made equipment in their Chinese fabs.
The Special Waivers at Risk
After the U.S. imposed export curbs to restrict China’s access to high-end chipmaking tools in 2022, it made an exception for certain non-Chinese manufacturers operating in China. Samsung and SK Hynix—the dominant players in memory chip production—and TSMC, the world’s largest contract chipmaker, received temporary authorizations that let them continue importing U.S. equipment without seeking individual licenses for every shipment.
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By 2023 and 2024, the companies had received what the Commerce Department refers to as “Validated End User” (VEU) status, allowing them a more stable and streamlined supply of restricted goods. VEU status not only eased export bureaucracy but also enabled predictable manufacturing operations, as long as the companies adhered to certain conditions, including limits on specific equipment and mandatory compliance reporting.
Now, these waivers may be withdrawn.
U.S. Strategy: Preemptive Leverage or Imminent Policy?
While the Department of Commerce has not formally moved to revoke the authorizations, a White House official confirmed the government is “laying the groundwork” to do so if necessary.
“There is currently no intention of deploying this tactic,” the official told reporters. “It’s another tool we want in our toolbox in case either this agreement falls through or any other catalyst throws a wrench in bilateral relations.”
This indicates that Washington is preparing for a possible breakdown in its delicate trade balance with China, while still banking on a rare earths agreement and diplomatic détente. However, the preparation alone sends a strong signal of the administration’s readiness to escalate restrictions if relations sour.
Impact on the Global Semiconductor Industry
Samsung and SK Hynix both operate major memory chip plants in China that are essential to global supply chains. TSMC, although not manufacturing its most advanced chips there, runs a mature-node fab in Nanjing.
Should the U.S. revoke the VEU waivers, all three companies would be forced to apply for case-by-case export licenses to import U.S. tools—an uncertain and often time-consuming process. Industry experts warn this could delay production timelines, increase operational costs, and potentially push manufacturers toward non-U.S. equipment vendors from Japan or Europe.
One Commerce Department official insisted that “chipmakers will still be able to operate in China,” suggesting the U.S. is not seeking an outright ban, but rather a recalibration that puts them on par with other companies under the October 2022 rules.
However, analysts say revoking the exemptions could inadvertently strengthen Chinese domestic competitors by cutting off foreign firms from reliable U.S. equipment access. One source described the move as “a gift” to China’s fledgling chip toolmakers, such as AMEC and Naura, which are quickly trying to close the technological gap.
Market Reactions
The mere news of the deliberations was enough to rattle the markets. Shares of leading U.S. chip equipment suppliers fell sharply: KLA Corp dropped by 2.4%, Lam Research lost 2.3%, and Applied Materials fell by 1.7%. Meanwhile, U.S.-based Micron Technology—one of Samsung and SK Hynix’s main competitors—saw its stock rise by 1.3%, reflecting investors’ expectations that tighter restrictions on its rivals could improve Micron’s market position.
Curtailing China’s Tech Rise
The potential policy shift is part of a broader U.S. strategy to curtail China’s rise in advanced technology. Washington has made no secret of its intention to limit Beijing’s access to the tools and expertise necessary for developing cutting-edge semiconductors, which are essential for artificial intelligence, defense, and advanced computing.
In the past two years, the administration of former Presiden Joe Biden took sweeping actions—including limiting investment in Chinese AI and semiconductor companies, restricting exports of AI chips, and tightening foreign collaboration standards for U.S.-funded tech research. The threat of removing VEU waivers adds another layer to that strategy.
It also reflects growing pressure from lawmakers and national security officials who argue that even allied foreign chipmakers in China pose a risk if they have unfettered access to American technology on Chinese soil.
While no official decision has been made, the fact that discussions have reached this point underlines a willingness by Washington to significantly raise the stakes in its tech rivalry with Beijing. If enacted, the move would likely provoke a response from both China and affected U.S. allies.
“This is about ensuring reciprocity and guarding against misuse of our most sensitive technology,” said a U.S. official familiar with the discussions.
However, others within the administration warn of the economic blowback such a policy could generate—not only on global supply chains but also on American equipment manufacturers that depend heavily on Chinese revenue.