U.S. Excludes Chinese Semiconductors from $850 Billion Procurement Market, Favoring Samsung and SK hynix
Starting December 23, 2027, U.S. federal procurement will exclude products with semiconductors from SMIC, CXMT, and YMTC. This move is aimed at addressing national security concerns and reducing dependence on Chinese supply chains. The rule affects a wide range of products, including servers and smartphones. As U.S. companies face semiconductor shortages, the exclusion is seen as beneficial for South Korean companies Samsung and SK hynix, whose market dominance is expected to continue amid rising DRAM and NAND flash prices.
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The U.S. Federal Acquisition Regulation Council will prohibit procurement of products with semiconductors from SMIC, CXMT, and YMTC starting December 23, 2027. This decision addresses national security risks and aims to limit reliance on Chinese semiconductors, impacting products like servers, PCs, and smartphones.
The exclusion is anticipated to benefit Samsung Electronics and SK hynix, as U.S. companies face memory shortages and rising prices. With the current semiconductor boom, projections indicate that the market strategies of Chinese firms may be hindered, allowing Korean companies to maintain market dominance.
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