Limitations on Chinese memory chipmakers may not apply to Samsung and SK Hynix, according to a report.

According to Reuters, the Biden administration's impending curbs on Chinese memory chipmakers may not apply to South Korean chipmakers Samsung (OTCPK:SSNLF) and SK Hynix.

According to sources cited by the news organisation, the Biden administration is attempting to limit technology exports to China, particularly those from American chip equipment manufacturers, out of concern that the technology might be utilised for military purposes.

No limitations would be placed on American suppliers who want to sell to Chinese-based chip companies if they make DRAM chips larger than 18 nm, NAND chips smaller than 128 layers, or logic chips larger than 14 nm.

According to sources, each application for a licence to sell equipment to foreign businesses with operations in China will be examined individually. Both SK Hynix and Samsung (OTCPK:SSNLF) operate memory chip factories in China.

If American firms develop DRAM chips below 18 nm, NAND chips above 128 layers, or logic chips below 14 nm, they would face a "presumption of rejection" norm and be required to apply for a licence in order to do business with Chinese firms, the news source noted.

According to the sources, if Chinese companies Yangtze Memory Technologies and ChangXin Memory Technologies produce advanced dynamic random access memory, or DRAM, or flash memory chips, the administration is likely to reject requests from U.S. corporations to supply them equipment.

Yangtze Memory Technologies had already been cited by the White House as a "direct threat" to Western Digital (NASDAQ:WD) and Micron Technology (NASDAQ:MU) in a study from June 2021. (WDC).

Republicans in Congress have pressed Apple (AAPL) over the possibility that iPhones include memory chips made by Yangtze Memory Technologies.

Following the release of the study, Wells Fargo analyst Joe Quatrochi noted that although the limits described above would probably be "viewed as unfavourable" for semiconductor capital equipment businesses, they should not come as a surprise "given headlines over the past few months."

As China is still in the early stages of developing a domestic memory industry, Quatrochi noted, "We continue to regard prospective export limitations on China memory clients as resulting in a net reduction of [wafer fab equipment] and not replaced by other industry players."

Although Quatrochi did not name any specific businesses, some of the biggest semiconductor equipment businesses include Applied Materials, KLA Corp., and Lam Research (AMAT).

The third quarter's earnings plummeted 32% year over year for Samsung (OTCPK:SSNLF), the company's first profit decline since 2019.