Major manufacturers Samsung and SK Hynix, leading producers of DRAM and flash memory chips globally, may have forfeited their privilege to procure American equipment for their production facilities in China.

In the rapidly evolving world of technology, two major players, Samsung and SK Hynix, are facing a significant challenge. Due to the high demand for High Bandwidth Memory (HBM), both companies initially targeted the end of 2025 or early 2026 to stop all production of DDR4 RAM, but are now considering extending their manufacturing to keep the cash flowing.

The US Commerce Department has announced plans to grant license applications to allow these companies to operate their existing facilities in China, but not to expand capacity or upgrade technology. This decision, however, may not be a definitive one, as the potential deal between the US Commerce Department and Samsung and SK Hynix has not been confirmed.

Samsung and SK Hynix are the world's largest manufacturers of DRAM and NAND flash memory chips. They supply the special HBM chips required for Nvidia's GB200 and AMD's MI355X. Nvidia primarily uses Micron chips for its GPUs, but a price increase in Samsung and SK Hynic's chips could affect other products as well.

The demand for AI chips is not expected to decrease in the near future, potentially leading to a higher demand for memory chips. This price increase could potentially impact the prices of graphics cards, memory sticks, and SSDs. To keep up with orders, Samsung and SK Hynix may need to improve their factories in China.

Samsung manufactures all of its DRAM in South Korea, while SK Hynix is estimated to have more than a third of its memory output from China. With the import restriction said to start within the next 120 days, there won't be any immediate impact on factory output. However, the long-term impact of this decision may result in Samsung and SK Hynix losing ground to Micron and Chinese DRAM and flash manufacturers like Yangtze Memory Technologies Company.

Nick Evanson, a seasoned tech writer with a background in physics and IT teaching, has been covering gaming and computer technology since the late 1990s. He recently published an article containing a list of recommended hardware, including the AMD Ryzen 7 9800X3D, MSI MAG X870 Tomahawk WiFi, G.Skill Trident Z5 RGB 32 GB DDR5-7200, WD_Black SN7100, and AMD Radeon RX 9070.

The move has resulted in a small but significant drop in share prices. Nick Evanson, who is also known for his interest in GPUs and open-world grindy RPGs, has been closely following this development. The US government, through its Department of Commerce, regulates and potentially allows Samsung and SK Hynix to import American semiconductor technology equipment to their factories in China via licensing, although currently it has tightened these conditions and withdrawn prior authorizations, requiring the companies to apply for specific licenses, which may be granted only for maintaining current operations, not for capacity expansion or technological upgrades. The US Commerce Department may potentially allow Samsung and SK Hynix to purchase American semiconductor equipment for use in China, but with an applicable tariff.

As the situation unfolds, both companies are likely to apply for the licences to import US chip technology and equipment. The future of memory chip manufacturing is uncertain, but one thing is clear: the demand for high-performance memory solutions will continue to grow, and companies will need to adapt to maintain their competitive edge.

Major manufacturers Samsung and SK Hynix, leading producers of DRAM and flash memory chips globally, may have forfeited their privilege to procure American equipment for their production facilities in China.