South Korea’s semiconductor exports jumped 199.5 per cent year-on-year in June 2026, reaching US$44.8 billion and accounting for 43.8 per cent of total exports. Yet this vital export engine still relies on China as both a market and production base, while South Korean firms’ ability to operate China-based semiconductor fabrication plants increasingly depends on US regulatory permission.
Samsung and SK Hynix’s plants in China depend on equipment, components and software governed by US export controls. In 2023, both firms obtained validated end-user access, allowing them to bring US chipmaking tools into their China factories without separate approvals each time. But in September 2025, these end-user statuses were suddenly revoked. The annual licences granted in 2026 offered short-term relief, but they did not restore the old commercial certainty. South Korean production in China continues to require recurring political permission.
This regulatory access is critical for South Korea, given its substantial semiconductor manufacturing operations in China and the dependence of its export competitiveness on maintaining those operations. China remains its largest semiconductor export destination — China and Hong Kong absorbed US$17.2 billion of South Korea’s semiconductor exports in May 2026. On the production side, around 30 to 40 per cent of SK Hynix’s dynamic random-access memory (DRAM) and NAND flash memory chips are made in China, as well as an estimated one-third of Samsung’s NAND flash memory chips.
