With President Donald Trump set to host Chinese President Xi Jinping at the White House next week, the semiconductor manufacturing footprint of Samsung Electronics and SK Hynix (NASDAQ: SKHY) in China has emerged as a critical issue for investors in Korean chip stocks and ETFs.

The exposure highlights a potential vulnerability beyond direct competition from Chinese firms. While both companies are directing newest capacity primarily to Korea, their existing operations in China remain meaningful, accounting for substantial portions of global output.

Manufacturing Footprint Data

According to TrendForce estimates cited by Kenneth Wong, CIO of xETFs, the production split for 2025 is as follows:

Wong noted that while China remains an important manufacturing base, the focus is shifting toward domestic capacity in Korea.

Regulatory Risks and Operational Continuity

US export controls have already complicated the ability of foreign chipmakers to operate and upgrade advanced facilities in China. For Samsung and SK Hynix, the primary concern is whether their existing Chinese fabs can continue to operate and receive necessary equipment to remain competitive.

Wong stated that this operational risk receives less attention than the possibility of direct restrictions on Chinese memory makers such as CXMT. He emphasized that the treatment of Samsung and SK Hynix’s own fabs is a key variable in future US-China semiconductor negotiations.

What the Numbers Show

The data reveals a significant concentration risk: SK Hynix relies on China for nearly half of its NAND production (40-45%) and over a third of its DRAM (35-40%). This heavy dependency means that any disruption to equipment access or licensing in China would directly impact a majority of its NAND supply chain, creating a divergence between its strategic shift to Korea and its current operational reality.

Implications for Korean Semiconductor ETFs

For investors using ETFs like the xETFs Korea Semiconductor ETF (NASDAQ: KSMH), China creates a two-sided dynamic. Restrictions on Chinese memory could support Korean producers by limiting competition, but tighter rules affecting Korean companies’ China operations could create uncertainty.

Wong said the most constructive outcome would be greater certainty that Samsung and SK Hynix can continue operating existing Chinese fabs without giving Chinese competitors greater access to advanced technology. He cautioned that restrictions on US purchases of Chinese memory could accelerate China’s efforts to develop a self-sufficient memory industry.

Investors should look beyond the headline outcome of the Trump-Xi meeting. Wong indicated that meaningful signals would be actual changes to export-control rules, licensing requirements, or the types of advanced semiconductor equipment Chinese fabs can access. The key question remains whether policy changes alter the ability of Korean companies to maintain their China operations while protecting their competitive position.

South Korea's SK Hynix is in discussions with Intel regarding potential memory chip production in the United States. The company confirmed no specific plans have been finalized, describing the talks as exploratory.

The discussions aim to strengthen SK Hynix's global competitiveness amid surging demand for artificial intelligence infrastructure. A deal would mark the South Korean firm's first domestic US memory production, offering Intel a way to utilize capacity at its delayed Ohio facility.

Potential Deal Structures

Sources indicate two primary scenarios under consideration:

• SK Hynix could lease part of Intel's long-planned chipmaking facility in Ohio.
• Alternatively, the companies might form a joint venture with major cloud firms to secure long-term memory chip supplies.

Market Reaction

Shares of both companies rose during premarket trading on Wednesday. Intel shares were up 5.03% at $102.03, while SK Hynix shares gained 3.49% to $180.93.

Regulatory and Political Context

A finalized agreement would align with efforts to bolster domestic semiconductor manufacturing capabilities. However, regulatory hurdles remain. South Korea's trade ministry indicated that production involving "national core technology" would be subject to review under the Industrial Technology Protection Act.

Recent Developments

In July, SK Hynix denied plans to acquire Intel’s Ohio semiconductor campus, stating it had "no plans for an acquisition." Intel affirmed its commitment to Ohio, noting operations have been pushed to 2030-31. The project, initially targeting production in 2025, now expects completion of two factories in 2030 and 2031.

Intel recently appointed former SK Hynix CEO Seok-Hee Lee as executive vice president of its contract chip-manufacturing business, overseeing advanced packaging.