- SK Hynix Inc (OTC:HXSCL) called the U.S. semiconductor embargo on China "painful" as it slashed its 2023 capital expenditure, the Financial Times reported.
- The Chinese chipmaker cut its Capex guidance by more than 50% after reporting a 60% drop in third-quarter operating profit due to higher inflation and sluggish global growth, missing market expectations.
- Due to the restrictions, SK Hynix expected difficulties upgrading its plant in Wuxi, China.
- The Wuxi plant accounts for nearly half of SK Hynix's production of D-Ram chips used in computers, smartphones, and servers.
- The chipmaker followed rivals, including U.S.-based Micron Technology, Inc (NASDAQ: MU) and Japan's Kioxia Holdings, cutting production after memory chip prices slid about 20% in Q3.
- SK Hynix would gradually reduce output, starting with lower-margin products, as the industry confronted "an unprecedented deterioration in market conditions."
- SK Hynix won a one-year exemption from the US restrictions.
- SK Hynix warned against its struggle to bring the most cutting-edge technology into China, which could increase production costs.
- Analysts expect the Wuxi factory's competitiveness against Samsung Electronics Co, Ltd (OTC:SSNLF) and Micron Technology to significantly weaken in two to three years if SK Hynix cannot ship EUV machines to China.
- Chinese chipmaker Yangtze Memory Technologies Corp ousted American employees in core tech positions following the U.S. embargo on China.
- YMTC's longstanding CEO Simon Yang, a U.S. passport holder, stepped down ahead of the sanctions reportedly triggered by Washington's increasing pressure on the company.
- Yang transitioned from the Chief role in late September to Deputy Chair. His current position in the company remained undecided.
- Price Action: MU shares traded higher by 0.46% at $56.12 on the last check Wednesday.
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