On September 8th, Bloomberg reported that the United States is considering an annual approval system for the export of semiconductor manufacturing materials to Samsung Electronics and SK Hynix's facilities in China. This proposed compromise is designed to avert disruptions in the global electronics sector. Previously, the Trump administration rescinded waivers granted during the Biden administration, which had facilitated easier access to essential material supplies for these two companies.

According to sources with knowledge of the situation, officials from the U.S. Department of Commerce put forward a "facility-wide license" proposal to their South Korean counterparts last week, intending to replace the existing indefinite authorization. The current "Validated End-User" license, which is in effect, will expire at the end of this year.

Sources indicated that the Trump administration now mandates these two South Korean firms to submit an annual declaration specifying the restricted equipment, components, and materials they will require for the upcoming year, with precise quantities clearly enumerated. This adjustment introduces additional complexity to the approval process but simultaneously offers a pathway for South Korea's leading semiconductor manufacturers to sustain operations at their extensive Chinese factories. The chips produced by these facilities are integral to a wide array of devices, spanning from smartphones to data centers.

U.S. officials have clarified that their intention is not to disrupt the normal functioning of these factories. However, they will not sanction the export of equipment that could potentially be utilized for factory upgrades or expansions. As of the time of this report, Samsung and South Korea's Ministry of Trade, Industry, and Energy have chosen not to comment, while SK Hynix and the U.S. Department of Commerce's Bureau of Industry and Security have not yet responded to requests for comment.