South Korean companies Samsung and SK Hynix halted sales of second-hand equipment used for chipmaking, a move taken to ensure they do not breach US export controls, Financial Times (FT) reported.

A total of three traders of second-hand chipmaking equipment told the publication the companies had been storing used machines in warehouses since 2022 instead of selling them on the secondary market.

The companies are wary of the machinery being sold to China, which could cause issues with the US government due to export controls placed on the country, a source said.

Another source told FT some Chinese buyers have been reselling equipment to Russia, potentially causing a backlash from the US due to western sanctions placed on the nation following its war with Ukraine.

Samsung and SK Hynix are apparently major distributors of second-hand equipment due to an existing landscape whereby chipmakers rapidly produce next-generation chips.

FT reported the companies traditionally bundle used equipment into packages, which are then sold to dealers who make them available at auction.

China is a major buyer, with chipmakers in the country using older silicon for appliances and cars.

The US imposed tougher export restrictions blocking Chinese companies from acquiring semiconductors and chipmaking equipment in October 2022.

However, the US granted waivers to Samsung and SK Hynix to send equipment to China to maintain and upgrade their own memory plants in the country, following lobbying from the South Korean government.