Citing some sources, Reuters reported that KLA Corp, one of U.S. ‘s leading chip toolmakers, will discontinue providing certain supplies and services to Chinese customers to adhere to the latest U.S. provisions.
This will start from October 12 and also includes SK Hynix of South Korea, the world’s second-largest memory chipmaker.
The outlet noted that China is KLA’s largest international market. In the last financial year that ended in June, the company earned $2.66 billion in sales, equivalent to one-third of its total revenue.
Following Lam Research Corp and Applied Materials Inc, the firm must cease supplying Chinese wholly-owned plants manufacturing advanced chips as part of key U.S. chip producers.
In an email sent to employees in China by KLA’s legal department, the company announced that from 11:59 p.m. local time on October 11, it will “stop sales and service to ‘advanced fabs’ in China for technology of NAND chips with 128 layers or more, and DRAM chips 18nm and below, and advanced logic chips.”
The move came after the Biden administration published new export controls last week to hinder the communist regime’s ability to purchase and use U.S. technology manufacturing high-end chips for military development.
Under this new regulation, firms must obtain licenses from the U.S. Department of Commerce before supplying China-based chipmakers with U.S. ‘s cutting-edge manufacturing equipment.
As a result, KLA’ shares on October 10 dropped nearly 5%.
According to the report, the company would also have to stop delivering supplies to Intel and SK Hynix’s chip factories in China.
SK Hynix reaffirmed that it would maintain operation in China and obtain a license for equipment under new U.S. regulations.
Among U.S.’s top customers, those impacted by the policy include two of China’s major memory chipmakers – Yangtze Memory Technologies Co Ltd, Changxin Memory Technologies Inc- and Semiconductor Manufacturing International Corp (SMIC) of Taiwan.
As reported by Da Ji Yuan, the Taiwanese government said on October 8 that it would comply with new U.S. export controls and keep an eye on the usage of Taiwan semiconductors in multiple weapons by the communist regime.
The outlet noted that White House officials said the new curbs are necessary to prevent China from utilizing U.S. advanced technology to develop its military, state-of-the-art new weapons and equipment, and further strengthen its surveillance network.