Reuters: The United States will block SK Hynix’s Wuxi plant from acquiring EUV lithography machines

In order to improve production efficiency more effectively, SK Hynix plans to upgrade the mass production facilities of its Wuxi factory in China to use the latest extreme ultraviolet lithography (EUV) chip manufacturing equipment produced by ASML in order to produce memory chips more efficiently.

However, according to a Reuters report today (November 18), three people familiar with the matter said that SK Hynix’s plan is in danger because US officials do not want the advanced equipment used in the process to enter mainland China.

SK Hynix is ​​one of the world’s largest suppliers of DRAM memory chips, and these chips are used in a variety of products from smart phones to data centers.

The United States has made objections in the past on the grounds that the delivery of such advanced tools to mainland China may be used to strengthen the country’s military power.

A senior White House official declined to comment specifically on whether US officials will allow SK Hynix to bring EUV equipment to mainland China. But the official told Reuters that the Biden administration is still focused on preventing China from using the technology of the United States and allies to develop the most advanced Semiconductor manufacturing, thereby helping China realize its military modernization.

The Hynix Wuxi plant is vital to the global electronics industry, because it produces about half of SK Hynix’s DRAM chips, accounting for 15% of the global total. Any major changes may have an impact on the global memory market. Analysis company IDC said that in 2021 alone, the demand for the global memory market will increase by 19%.

A source familiar with SK Hynix’s operations in China said that as new chips take up a larger share of SK Hynix’s production in two to three years, the company will need EUV machines to control its costs and increase production capacity.

The level of concern within SK Hynix has not been reported before. If this situation is not resolved in the next few years, SK Hynix may be at a disadvantage in the competition with the number one memory chip manufacturer Samsung Electronics Co., Ltd. and American Micron Technology, the latter of which is in the DRAM market. The other two main players. Samsung and Micron are also turning to Asmar’s EUV machines, but said they will not use them in factories where those machines face export restrictions.

According to two people familiar with the situation, the ASML machine problem has attracted enough attention within SK Hynix, and CEO Li Xixi raised the issue with US officials during a visit to Washington, DC in July.

In this regard, SK hynix said: According to various market environments, it operates flexibly and is actively responding to the needs of the market and customers.

During Trump’s administration, he successfully lobbied the Dutch government to prevent the sale of ASML’s technology to SMIC.

An ASML spokesperson said the company complies with all export control laws and sees it as an “effective tool” for the government to ensure national security. But the company said that excessive use of these controls “may affect the production capacity needed to stay ahead of the growing Semiconductor demand.”

The spokesperson said in a statement: “Extensive use of export controls may exacerbate microchip supply chain issues. These issues have become the main concern of governments and policy makers around the world due to spillover effects on other industries, such as the automotive industry. .”

Analysts believe that US officials will not think that SK Hynix’s introduction of EUV lithography machines into mainland China is any different from the previous practices of Chinese companies.

Dan Hutchison, CEO of VLSI Research, said that these regulations may apply to any chip manufacturing business in China, whether foreign or domestically controlled. Any company that promotes EUV equipment in China has provided China with chip production capacity. Once EUV hits mainland China, you don’t know where it will go. The Chinese are always good at seizing opportunities to do whatever they want.