With President Donald Trump set to host Chinese President Xi Jinping at the White House next week, Samsung Electronics and SK Hynix’s (NASDAQ:SKHY) deep semiconductor manufacturing footprint in China is emerging as a key issue for investors in Korean chip stocks and ETFs.
China accounted for roughly 30-35% of Samsung’s NAND output in 2025, while SK Hynix produced approximately 35-40% of its DRAM and 40-45% of its NAND in the country, according to TrendForce estimates cited by Kenneth Wong, CIO of xETFs.
"China remains an important manufacturing base," Wong told Benzinga. "Both companies are now directing their newest capacity primarily to Korea, but the China footprint remains meaningful."
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The China Exposure Investors May Be Overlooking
The figures highlight a potential vulnerability that goes beyond Chinese competition.
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 question is therefore not only how quickly Chinese companies such as CXMT can expand, but also whether their existing Chinese fabs can continue to operate and receive the equipment needed to remain competitive.
Wong said this is an area receiving less attention than the possibility of direct restrictions on Chinese memory makers.
"A lot of attention is on whether the U.S. could eventually restrict Chinese memory more directly," Wong said. "What gets less attention is the treatment of Samsung and SK Hynix’s own fabs in China and their ability to maintain and upgrade those facilities over time."
That makes the outcome of future US-China semiconductor negotiations particularly important for Korean chipmakers.
What It Could Mean for Korean Semiconductor ETFs
For investors using ETFs to gain exposure to Korean semiconductors, China creates a two-sided dynamic. Restrictions on Chinese memory could potentially support Korean producers by limiting competition, while tighter rules affecting Korean companies’ China operations could create additional uncertainty.
Wong said the most constructive outcome would be greater certainty that Samsung and SK Hynix can continue operating their existing Chinese fabs without simultaneously giving Chinese competitors greater access to advanced semiconductor technology.
"Restrictions on U.S. purchases of Chinese memory could support demand for Korean memory in the near term," Wong said. However, he cautioned that such measures could also accelerate China’s efforts to develop a self-sufficient memory industry.
The xETFs Korea Semiconductor ETF (NASDAQ:KSMH) provides targeted exposure to Korean semiconductor companies, including Samsung and SK Hynix.
The China exposure also means investors should look beyond the headline outcome of a Trump-Xi meeting. Wong said the meaningful signals would be actual changes to export-control rules, licensing requirements or the types of advanced semiconductor equipment Chinese fabs can access.
For Korean semiconductor ETFs, therefore, the key question is not simply whether US-China tensions rise or fall. It is whether policy changes alter the ability of Korean companies to maintain their China operations while protecting their competitive position in advanced memory.
Photo: JHVEPhoto / Shutterstock
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