The Trump administration will make it harder for Samsung Electronics and SK Hynix to ship critical equipment to their chipmaking operations in China, dealing a potential blow to the companies’ production in the world’s largest semiconductor market.

Under a notice published Friday, the Commerce Department said it was revoking waivers for Samsung and SK Hynix to use U.S. technologies in their Chinese operations. The semiconductor companies had been operating in China under regulations that allow them to import chipmaking equipment without applying for a new license each time.

The Trump administration’s move would revise what’s known as the validated end user, or VEU, rules, handicapping the ability to make chips in the country and jeopardizing Beijing’s access to certain technologies.

The waivers date back to 2023 when then-President Joe Biden’s administration moved to allow the South Korean chipmakers to acquire the equipment they need to sustain and expand their giant operations in China. Washington had effectively granted an indefinite waiver on broader restrictions banning the shipment of advanced chipmaking gear to the country.

SK Hynix said in a statement that it would "maintain close communication with both Korean and the U.S. governments and take necessary measures to minimize the impact on our business.” Samsung didn’t immediately respond to a request for comment.

In a statement announcing the decision, the Commerce Department said that it has no intention of granting licenses that would allow companies to "expand capacity or upgrade technology” at manufacturing facilities in China. The agency indicated that the move was intended to end a break that it saw as aiding foreign producers without any similar benefit for American manufacturers.

"The Trump administration is committed to closing export control loopholes — particularly those that put U.S. companies at a competitive disadvantage,” Undersecretary of Commerce Jeffrey Kessler, who oversees export control programs, said in the statement. "Today’s decision is an important step towards fulfilling this commitment.”

The companies have 120 days until the waiver expires, according to an announcement in the U.S. Federal Register. Companies can seek licenses to continue operations. The notice also listed a unit of Intel that has since been acquired by SK Hynix.

Both Samsung and SK Hynix rely on China for a sizable portion of their memory chip production capacity. The two South Korean companies make components that are incorporated into smartphone and consumer electronics assembled in the country.

The removal of the waiver will have a small impact on the market for semiconductor machinery, according to research from Bernstein. Non-Chinese companies only spent about $2 billion on new gear for their factories in that country in 2024, accounting for less than 2% of total industry sales on equipment last year.

Plants in China owned by overseas companies do have an outsized influence on memory chip supply, though. They account for 10% of computer memory output and 15% of storage chips, according to the report.

Such chips are crucial parts of smartphones, supercomputers and other products vital to the technology industry, including Apple's iPhones and Nvidia processor-based AI hardware. They all depend on a steady supply of both types of memory chips.

The U.S. decision emerged days after President Donald Trump met his South Korean counterpart, President Lee Jae Myung, at the White House. In their meeting Monday, the two men discussed a recently sealed agreement that set tariffs on South Korean goods at 15%, sparing the country from the 25% that Trump had threatened.

South Korea’s Ministry of Trade, Industry and Energy said in a statement Friday that it would work to minimize disruption for the country’s businesses.

"The government has been closely communicating with the U.S. Department of Commerce on possible adjustments to the VEU system, stressing the importance of smooth operations of our chipmakers’ Chinese facilities for global semiconductor supply chain stability,” the ministry said.