The US is increasing restrictions on the Chinese semiconductor sector under the Joe Biden administration. This could impact Samsung.

Following the US semiconductor export ban, South Korean memory chipmakers Samsung and SK Hynix are wondering whether the US government will bring their manufacturing businesses in China to a standstill to restrict China’s rise.

According to a report by Business Korea, the US government is on the verge of announcing new restrictions on semiconductor technology and equipment exports to China.

Moreover, these semiconductor restrictions could be based on the FDPR (Foreign Direct Product Rule). Some sources claim the Biden administration is trying to derail China’s military and technological advancements.

For those unaware, the FDPR blocks a product using US software, tech, or equipment from launching in a certain country, regardless of where it is produced.

To recap, the US imposed the same rule on Huawei a couple of years ago. The move triggered a dramatic decrease in the company’s smartphone shipments.

Notably, the new semiconductor restrictions are likely to affect Samsung Electronics and SK Hynix. South Korea exported $69 billion in memory chips last year. Out of which, 48 percent went to China.

Samsung’s Q3 2022 earnings show that the company is currently struggling amid lower memory chip prices and a major drop in memory and storage chip demand.

Furthermore, the US ban will affect China’s YMTC, which is an important power in NAND technology. About 40 percent of Samsung’s NAND flash output comes from Xian.

The rapidly expanding YMTC reportedly poses a serious threat to US-based Western Digital and Micron Technology Inc. since it offers low-price solutions. The Commerce Department is currently investigating whether YMTC violated US export controls by providing chips to Huawei.