US restrictions on China's SMIC set to push Samsung chip sales

Seoul, Oct 3 (IANS) South Korean chipmakers like the giant Samsung are expected to benefit from the US export restrictions against China's leading foundry firm, Semiconductor Manufacturing International Corporation (SMIC), analysts here said on Saturday, as the ban could give them more opportunities to secure orders.

The US Commerce Department recently added SMIC to its blacklist, saying that exports to the Chinese firm pose an "unacceptable risk" of being used for Beijing's military activities.

The move prevents US firms from exporting their products and technologies to SMIC without obtaining a license.

The restriction means SMIC, also the world's fourth largest foundry firm, could struggle to get advanced chip materials and equipment from U.S., and have difficulties in filling their customers' orders.

Against this backdrop, analysts here said the US move will benefit foundry firms here, such as Samsung Electronics and DB HiTek Co, as well as local chip equipment suppliers, reports Yonhap news agency.

As of the third quarter, Samsung is the world's second largest contract chipmaker behind Taiwan Semiconductor Manufacturing (TSMC), according to market researcher TrendForce.

DB HiTek is the 10th largest foundry firm.

Since the US move will also impact Huawei Technologies, which is already suffering from restrictions on exports to the US, analysts said South Korean firms that compete against the Chinese tech titan can achieve further growth.

In particular, Samsung has been trying hard to fend off Huawei in the smartphone market.

Huawei has been hit by the US sanctions that ban the supply of semiconductors made with American equipment and technology to the Chinese firm without prior approval from Washington.

"SMIC's biggest customer is Huawei, which accounts for 18.7 per cent of its sales," Lee Seung-woo, an analyst at Eugene Securities, said. "The latest US move further chokes Huawei and leaves the company with no exits".

--IANS

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