SK Hynix. Photo: CFP

South Korea's SK Hynix said it takes a long time before the company upgrades its facility in China, but the company will follow market demand and international regulations to operate facilities after media reported it could be a potential victim of a US-China tech war.

SK Hynix will have a relatively long time before it becomes necessary to reinvest in its Wuxi facility in East China's Jiangsu Province for advanced processes as the firm remains in the initial stages of developing extreme ultraviolet lithography (EUV) equipment across its domestic facilities in South Korea, the company said in an announcement sent to the Global Times on Friday. 

SK Hynix is doing its best to operate facilities in China following market demand and complying with international regulations, the company added. 

The response came after the media reported that its chip factory renovation plans in Wuxi city may be cancelled due to US opposition.

Reuters reported on Thursday that plans by SK Hynix to overhaul a huge facility in China are in jeopardy, citing sources, for US officials do not want advanced equipment used in the process to enter into China.

The report said the potential setback could mean SK Hynix is the next victim of the geopolitical struggle between the US and China.

SK Hynix is one of the world's largest suppliers of DRAM memory chips that go into everything from smart phones to data centers.

Reuters reported that SK Hynix production plans call for the company to upgrade a mass production facility in Wuxi with some of the latest EUV chipmaking machines made by Dutch firm ASML. 

The Wuxi factory is critical to the global electronics industry because it makes about half of SK Hynix's DRAM chips, which accounts for around 15 percent of the global total. 

In May of 2020, ASML signed a cooperation agreement with local departments in Wuxi, committing to accelerate the base expansion in terms of lithography equipment technical service, and expand the services to Jiangsu Province and neighboring cities, according to www.xhby.net.

ASML's EUV lithography technology is indispensable cutting-edge equipment for semiconductor microprocessing. In February, SK Hynix signed a contract with ASML to import about 20 EUV units by 2025.

US Trade Representative Katherine Tai is currently in South Korea discussing trade issues such as supply chain for key components and steel tariffs.

Earlier this month, South Korea said its technology firms will provide some semiconductor data to the US following a request by the Commerce Department for companies in the supply chain to provide information on inventory and sales of chips, according to Bloomberg.

Global Times