Shares in Samsung, SK Hynix drop after US makes it harder to make chips in China
ANI
Synopsis
Samsung and SK Hynix shares plummeted following Washington's revocation of authorizations, restricting their access to U.S. semiconductor manufacturing equipment for Chinese plants. Samsung shares declined by 2.3%, while SK Hynix experienced a 4.4% drop. SK Hynix plans to collaborate closely with Korean and U.S. governments to mitigate business impact.
By Reuters
Shares in Samsung Electronics and SK Hynix dropped on Monday after Washington revoked authorisations that allowed them to secure U.S. semiconductor manufacturing equipment for their chip plants in China.
Analysts estimate that more than a third of Samsung's DRAM output comes from China, while 30-40% of SK Hynix's DRAM and NAND production is based there.
Shares in Samsung were down 2.3% in morning trade while shares in SK Hynix lost 4.4%. That compared with a 0.7% fall in the benchmark KOSPI.
The two chipmakers had, until now, benefited from exemptions to sweeping restrictions that the U.S. had imposed on chip-related exports to China.
In response to the move, SK Hynix said it would maintain close communication with both the Korean and the U.S. governments and take necessary measures to minimise the impact on its business.
Samsung declined to comment.
Ryu Young-ho, a senior analyst at NH Investment & Securities, said he thought the short-term impact would be limited.
"Samsung and SK Hynix have planned their new production lines and processes primarily in South Korea, while maintaining the status quo in China," he said.
Shares in other chip assembly and product suppliers also retreated on concerns that they too would be affected. Hana Micron fell 1.7% and Hanmi Semiconductor dropped 4.4%.
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The move is set to go into effect in 120 days.Analysts estimate that more than a third of Samsung's DRAM output comes from China, while 30-40% of SK Hynix's DRAM and NAND production is based there.
Shares in Samsung were down 2.3% in morning trade while shares in SK Hynix lost 4.4%. That compared with a 0.7% fall in the benchmark KOSPI.
The two chipmakers had, until now, benefited from exemptions to sweeping restrictions that the U.S. had imposed on chip-related exports to China.
In response to the move, SK Hynix said it would maintain close communication with both the Korean and the U.S. governments and take necessary measures to minimise the impact on its business.
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Samsung declined to comment.
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Ryu Young-ho, a senior analyst at NH Investment & Securities, said he thought the short-term impact would be limited.
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"Samsung and SK Hynix have planned their new production lines and processes primarily in South Korea, while maintaining the status quo in China," he said.
Shares in other chip assembly and product suppliers also retreated on concerns that they too would be affected. Hana Micron fell 1.7% and Hanmi Semiconductor dropped 4.4%.
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