US chip toolmaker KLA Corp will cease offering some supplies from Wednesday to China-based customers including South Korea’s SK Hynix in compliance with U.S. regulations, Reuters news report said.
China is KLA’s largest geographic market, bringing in $2.66 billion in sales, or nearly 30 percent of its total revenue in the last fiscal year that ended in June.

Under new U.S. regulations released on Friday, companies looking to supply Chinese chipmakers with advanced manufacturing equipment must first obtain a licence from the U.S. Department of Commerce.

KLA will stop sales and service to advanced fabs in China for technology of NAND chips with 128 layers or more, and DRAM chips 18nm and below, and advanced logic chips.

KLA would also cease supplying China chip plants owned by Intel and SK Hynix, the world’s second-largest memory chipmaker.

SK Hynix aims to seek a license under new U.S. export control rules for equipment to keep operating its factories in China.

China’s two leading memory chipmakers – Yangtze Memory Technologies (YMTC), Changxin Memory Technologies (CXMT) – and contract chipmaker Semiconductor Manufacturing International (SMIC) are among the major customers affected by the U.S. export control.

Along with Lam Research Corp (LRC) and Applied Materials, KLA is among top U.S. toolmakers now required to halt shipments to Chinese-owned factories producing advanced chips.