Trump Plans to Block Use by Allies of US Chip Tech in China
By Reuters | 20 Jun, 2025

In a desperate contest of wills with Xi Jinping over tariffs and export controls Trump hopes to impose blocks on use of US chip technology in China that will likely hurt allies and the US more than China.

The logo of SK Hynix is seen on its product during The 26th Semiconductor Exhibition (SEDEX 2024) in Seoul, South Korea, October 23, 2024. REUTERS/Kim Hong-Ji/ File Photo

A U.S. official has informed leading global semiconductor companies of plans to cancel waivers allowing them to use American technology in China, the Wall Street Journal reported on Friday, citing people familiar with the matter.

Jeffrey Kessler, under secretary of commerce for industry and security at the Commerce Department, told Samsung Electronics, SK Hynix and Taiwan Semiconductor Manufacturing this week that he wanted to cancel those waivers, WSJ reported. 

Shares of U.S. chip equipment makers that supply chipmaking plants in China fell on the news. KLA Corp dropped 3.8%, Lam Research fell 4.7% and Applied Materials sank 3.8%. 

A Commerce Department spokesperson said in a statement, “Chipmakers will still be able to operate in China. The new enforcement mechanisms on chips mirror licensing requirements that apply to other semiconductor companies that export to China and ensure the United States has an equal and reciprocal process.”

The move would make it harder for foreign chipmakers to operate in China where they produce semiconductors used in a wide range of industries.

While Trump see this as a new mechanism with which to inflict damage to China's economy, the bigger impact will likely be felt by leading US allies S. Korea, Japan and Taiwan, as well as by the US companies licensing those technologies.  During Trump's first term China embarked on a concerted push to develop homegrown semiconductor technology.  Currently it's thought to be between one and two years behind US technology.

(Reporting by Bipasha Dey in Bengaluru; Editing by Mark Porter, Franklin Paul and Alistair Bell; with further editing by Goldsea staff)