Even large storage companies dare not sell their old equipment

Maggie March 21, 2024

South Korean storage giants Samsung Electronics and SK Hynix have stopped selling second-hand chip manufacturing equipment due to concerns about violating US export controls and Western economic sanctions against Russia.

South Korean storage giants Samsung Electronics and SK Hynix have stopped selling second-hand chip manufacturing equipment due to concerns about violating US export controls and Western economic sanctions against Russia.

These two companies are no longer selling old machines, and these devices are piled up like mountains in the warehouse.

If these devices accidentally fall into the hands of China or Russia, it may damage the relationship with the United States.

After the United States implemented a semiconductor ban on China in 2022, these chip manufacturers began hoarding old machines and not selling them. Samsung and SK Hynix are the main second-hand equipment suppliers in the market, and due to the continuous renovation of process technology, the turnover rate of these hardware devices is also very fast.

They usually pack several old machines together and sell them to distributors, and then sell them by auction. Chinese chip manufacturers are the largest customers, mostly used in household appliances and automobiles, and some require lower end chips.

Devices that are not needed in South Korea can be sold to China for refurbishment and installation, but they all belong to the category of less advanced processes.

However, even with old equipment that has been in use for 10 years, such as exposure machines for producing logic and storage chips, once refurbished, they can still be used to manufacture high-end chips.

SK Hynix, whose warehouse is already packed, has begun to sell some second-hand machines, but try to avoid selling American made wafer grinders and etching machines.

The South Korean government is also aware that old devices from Samsung or SK Hynix will inevitably enter the Chinese market, which will be detrimental to the relationship between South Korea and the United States.

Samsung and SK Hynix both have storage chip factories in China, accounting for approximately half of their respective production capacity.

However, these two South Korean companies have obtained indefinite immunity to move American made machines into China for use.

These chip manufacturers have also placed their old equipment in China, citing that in case the US government further strengthens export controls in the future, semiconductor companies may need lower end old machines.

SK Hynix's senior management in China believes that the company is well aware that the United States may suspend immunity at any time, and therefore is not willing to dispose of old equipment.

There are several ways to dispose of second-hand machines, such as selling them to others, storing them in warehouses, or simply scrapping them. But even if there are not thousands of old devices here, there are at least hundreds, worth millions of dollars. However, currently the company's senior management still chooses to pile them up in the warehouse first.