High political drama unfolded on Wednesday in South Korea with the country almost thrown into an indefinite period of martial law, a move which was swiftly overturned by the country’s lawmakers.

While that decision could have had a damaging effect on the country’s advanced tech industry, halfway across the world, political developments in key South Korean ally, the US, which announced a new series of curb on chip exports to China this week is now expected to have only a limited impact on Korean chipmakers, mainly Samsung Electronics.

On Monday the US announced a third set of restrictions on exports of chips to China, including curbs on China-bound shipments of high-bandwidth memory chips, necessary for high-end applications like AI training; new curbs on 24 additional chipmaking tools and three software tools; and new export curbs on chipmaking equipment made in countries such as Singapore and Malaysia, reported Reuters.

The export ban covers HBM with a memory bandwidth density greater than 2 gigabytes per second per square millimetre.

SK Hynix, Samsung Electronics and US-based Micron Technology are the only three chipmakers that make the HBM chips, and they will be barred from selling HBMs to China starting December 31.

SK Hynix HBM3E

SK Hynix HBM3E

Currently however, most of the up-to-date, high-value HBMs are sold not to China, but the US.

Samsung reportedly generates about 20 per cent of its HBM chip sales from China.

SK Hynix dominates the HBM market with a share of approximately 52 per cent, and supplies most of its products to TSMC in Taiwan, the majority of whose clients are based in the US, including Nvidia.

Samsung, with a share of about 42 per cent in the HBM market, has reportedly been selling older HBM2 and HBM2E chips to China, as the country seeks to stockpile the advanced chips ahead of the enforcement of the US sanctions.

The new curbs though would pressure Samsung to diversify its clientele and make up for lost orders from China.

“Samsung should work to reduce uncertainties and hurry to secure deals with major US tech firms to supply its HBM3E and HBM4 chips,” Ahn Ki-hyun, an official at the Korea Semiconductor Industry Association said, according to the Korea Herald.

While SK Hynix is the main supplier of the latest fifth-generation HBM3E chips to Nvidia, Samsung has hinted it will supply to Nvidia soon. Currently, the tech giant is delivering its HBM3E chips to AMD.

Both Samsung and SK Hynix are expected to launch the next-generation HBM4 next year.

“For now, the regulation is largely considered to have a limited impact. But given the potential of HBM products and the current market trends, the industry is missing out on potential customers,” an industry official said.