The United States is proposing annual approvals for the export of chipmaking supplies to Samsung Electronics and SK Hynix's China-based factories, Bloomberg News reported on Monday.

Officials in the U.S. Commerce Department last week presented to Korean counterparts a "site license" idea to supplant indefinite authorizations the chipmakers secured under the previous administration, Bloomberg News reported, citing people familiar with the matter.

Those so-called validated end user, or VEU, designations are set to expire at the end of this year, it added.

The VEU system granted Samsung and SK Hynix perpetual approval to ship estimated quantities of semiconductor tools and materials to their Chinese plants, based on prior security and monitoring commitments.

The proposal would require the two companies to seek U.S. approval annually for exact quantities of restricted equipment, introducing more regulatory steps but ensuring continuity of operations, Bloomberg reported.

Discussions remain ongoing and no final decision has been made, it added.

The U.S. draft plan has drawn mixed reactions in Seoul and Industry and government officials were reportedly relieved that a framework remains but frustrated by the increased bureaucratic burden, Bloomberg reported.

The White House and the U.S. Commerce Department did not immediately respond to Reuters' requests for comment. Reuters could not immediately verify the report.

The U.S. revoked the VEU waivers shortly after former South Korean President Lee Jae Myung met with President Donald Trump to discuss defense and investment. Meanwhile, U.S. immigration raids involving South Korean firms’ U.S. ventures have added to tensions.

Since 2022, the Biden and Trump administrations have imposed extensive export controls to curb China's semiconductor and AI capabilities. Biden granted waivers to Samsung, SK Hynix and Taiwan Semiconductor to soften the impact on allied companies with Chinese factories.

Reuters contributed to this report