Shares in South Korea’s top chipmakers declined on Monday after Washington revoked exemptions that had allowed them to import US semiconductor manufacturing equipment for factories in China, Reuters reported.

Samsung Electronics fell 2.3 percent in morning trade and SK Hynix dropped 4.4 percent, compared with a 0.7 percent decline in the KOSPI index. The authorisations, known as Validated End-User (VEU) waivers, will expire in 120 days, removing a carve-out that since 2022 had permitted the companies to secure advanced equipment for their Chinese facilities.

Investors also sold shares in other South Korean chip suppliers, with Hana Micron down 1.7 percent and Hanmi Semiconductor off 4.4 percent.

The decision is significant given Samsung and SK Hynix’s reliance on China for memory chip production. Market researchers estimate that roughly thirty-five percent of Samsung’s NAND output and as much as forty percent of SK Hynix’s DRAM comes from plants in China. The companies will now need to apply for individual licences, with approvals limited to maintaining existing operations rather than expanding or upgrading capacity.

SK Hynix said it would maintain close communication with both the South Korean and US governments to minimise any business impact. Seoul has voiced concern that the restrictions could disrupt global semiconductor supply chains, while Beijing’s Commerce Ministry condemned the move and vowed to defend the rights of affected companies.