China Opposes US Revocation of Semiconductor Firm Authorizations.

China's Ministry of Commerce opposes the US decision to revoke the "validated end-user" authorization for three semiconductor companies operating in China, citing the negative impact on global industrial and supply chains. The ministry urges the US to correct its wrongdoings and safeguard global stability, while also promising to take measures to protect Chinese enterprises' rights and interests.

The U.S. has announced plans to tighten restrictions on global chipmakers operating in China, revoking authorizations that allowed Samsung Electronics, SK Hynix, and Intel to receive American semiconductor manufacturing equipment in the country [1]. This move, which will take effect in 120 days, has sparked opposition from China's Ministry of Commerce, which cites negative impacts on global industrial and supply chains [2]. The ministry has urged the U.S. to correct its decision, promising to protect Chinese enterprises' rights and interests [3].

The revocation of these waivers, known as "validated end-user" (VEU) authorizations, has significant implications for the semiconductor industry. Samsung, SK Hynix, and Intel will now need to obtain individual licenses to buy equipment in China, potentially disrupting their supply chains and research and development efforts [1]. This could weigh on sales by U.S. equipment makers such as KLA Corp. (KLAC), Lam Research (LRCX), and Applied Materials (AMAT), while also creating openings for Chinese suppliers [1].

The impact on the financial performance of these companies is already evident. Samsung reported a 56% year-over-year drop in operating profit in Q2 2025 due to export curbs and delayed HBM certifications [2]. SK Hynix, however, posted a record 9.2 trillion KRW operating profit, driven by strong HBM demand for Nvidia’s AI systems [2]. Intel, meanwhile, faced a $2.9 billion net loss, underscoring its struggle to compete in the AI era [1].

Investor sentiment has been volatile, with Samsung's shares underperforming the broader market, while SK Hynix's stock surged on its Q2 record profits [2]. Intel's valuation remains contentious, with a P/E ratio of 88 and forward P/E of 227 suggesting overvaluation risks [3].

The broader sector is also grappling with China's push for self-sufficiency. U.S. export controls aim to curb China’s access to advanced chips, but they inadvertently accelerate domestic innovation. Companies like SMIC, despite a 19.5% Q2 net income drop, are gaining traction in niche markets [1].

The U.S. policy shift has created a stark divide between firms aligned with its strategic interests and those caught in the crossfire. TSMC, which benefits from U.S. export policies, reported Q2 revenue of $30.1 billion, while Micron’s market share in memory chips has expanded due to its U.S. alignment [1]. Conversely, Chinese firms like SMIC face declining relevance, with their revenue growth stifled by U.S. restrictions [1].

As the U.S. tightens its grip on technology exports, the semiconductor sector will continue to be a barometer of global power shifts—and a high-risk, high-reward arena for investors. For those navigating this complex landscape, understanding how these geopolitical dynamics reshape competitive advantages and financial resilience is paramount.

References:
[1] https://stocktwits.com/news-articles/markets/equity/us-revokes-intel-samsung-sk-hynix-waivers-on-china-chip-equipment/chtTKpgRdNh
[2] https://www.ainvest.com/news/china-tech-war-impact-semiconductor-giants-samsung-sk-hynix-intel-crosshairs-2508/
[3] https://www.ainvest.com/news/legal-economic-implications-trump-tariffs-global-markets-navigating-uncertainty-shifting-trade-policy-landscape-2508-69/