The tariff war between the US and Chinese governments appears to have been resolved for now, but the western country's government is apparently preparing to introduce new restrictions if trade talks with China do not yield any satisfactory results.
The US is expected to restrict Validated End User (VEU) business licenses, especially for chip manufacturing companies such as TSMC, Samsung and SK Hynix that have chip production plants in China.
It is reported that if the two governments do not reach an agreement when the trade talks end, the VEU licenses of the companies mentioned above will be revoked if they are found to be using high-tech semiconductor chip manufacturing equipment (such as EULV machines and so on) in China.
This VEU license simply allows these companies to use chip manufacturing equipment manufactured by US companies and their affiliates such as Applied Materials, KLA and ASML in China to produce processor and memory chips using the latest technologies.
However, obtaining and maintaining it is quite difficult because these companies must also prove that the components produced in China using the technology are not sold to companies or governments in that country.
If this license is revoked, the production capacity of components for the global market will plummet and will cause the prices of the components to increase sharply.
But for now, the US government has confirmed that this restriction will only be applied if trade talks with China on tariffs and rare earth raw materials do not reach an agreement.