*

SK Hynix ( HXSCF ) and Samsung will need licenses for China

equipment

*

U.S. equipment makers KLA Corp ( KLAC ), Lam Research ( LRCX ) and Applied

Materials ( AMAT ) likely impacted

*

New rule takes effect in 120 days

(Adds background, share prices, companies not responding to

comment requests, removes Intel ( INTC ) from headline and lead)

By Karen Freifeld

Aug 29 (Reuters) - The United States is making it more

difficult for chipmakers Samsung and SK Hynix ( HXSCF )

to produce chips in China by revoking authorizations

that allowed the companies to receive American semiconductor

manufacturing equipment there, according to the Federal

Register.

The U.S. Commerce Department had given the companies

exemptions to sweeping restrictions created in 2022 on the sale

of U.S. semiconductor equipment to China.

The companies will now need to obtain licenses to buy the

equipment for China. The federal filing also included Intel ( INTC )

among the companies who lost their authorization for

China, but Intel ( INTC ) sold its Dalian China unit in a deal that was

finalized earlier this year.

The Commerce Department and the three companies did not

immediately respond to requests for comment.

The licensing change will likely reduce sales to China by

U.S. equipment makers KLA Corp ( KLAC ), Lam Research ( LRCX )

and Applied Materials ( AMAT ). The companies did not

immediately respond to requests for comment.

Shares of Lam fell 3.7%, Applied Materials ( AMAT ) dropped 1.9%

and KLA shares were down 2%.

"just laying the groundwork" in case the truce in trade

talks reached between the two countries fell apart.

The United States and China are now operating under a

tariff truce, with levies of

30% on Chinese imports

to the U.S. and 10% Chinese duties on U.S. goods locked in

until November. The trade war between the world's two largest

economies has affected everything from rare earths needed by

U.S. industry to China's purchase of U.S. soybeans.

The White House did not immediately respond to a request

for comment.

Thousands of license applications by U.S. companies to

export goods and technology to China also have been in limbo in

recent months, creating a

massive backlog

, as Reuters reported earlier this month, including for

billions of dollars' worth of semiconductor manufacturing

equipment.

Foreign chipmakers like Samsung and Hynix ( HXSCF ) now have what

is known as Validated End User status, which allows U.S.

suppliers to ship goods to them "more easily, quickly and

reliably," as the Commerce Department says on its website, than

they would if export licenses were required. That VEU status

will be removed.

The move may help domestic Chinese equipment makers,

whose tools can fill gaps. It also may help Micron, a

major U.S. competitor to South Korea's Samsung and SK Hynix ( HXSCF ) in

the memory chip sector.

The revocations will not take effect for 120 days, according

to the posting.

Intel ( INTC ) sold its Dalian NAND memory manufacturing facility in

China to Seoul-based SK Hynix ( HXSCF ).