The move will allow the chipmakers, which include Samsung, SK Hynix and TSMC, to continue to import US chipmaking tools to China for use in their existing fabs in the country

South Korean president Yoon Suk Yeol vowed to support the South Korean chip sector in the face of heightened tensions between China and the United States

"The process of diversifying in different geographies is an excellent strategy by TSMC and so TSMC is now part of Nvidia's diversity and redundancy strategy," chief Jensen Huang said

The Nasdaq Golden Dragon China Index of New York-listed mainland companies, consisting mainly of internet giants such as Alibaba Group, Baidu.com and JD.com, lost 5.6% this month

Commerce Secretary Gina Raimondo said the US "firmly opposes" the ban and that it is working closely with allies to address such "coercion"

South Korea is in the crosshairs of a tit-for-tat row between China and the United States over semiconductors

Stocks of China's semiconductor companies have seen large gains since March with NAURA Technology Group up 14%, Piotech up 45% and ACM Research Shanghai up 19%

“We can theoretically build chips outside of Taiwan, it’s possible [but] the China market cannot be replaced. That’s impossible,” Huang told FT

Officials from the world's biggest economies will meet on Thursday to 'thaw' tense relations, complicated by China's recent ban on Micron and a tough stance against Beijing by G7 nations

South Korea's Samsung and SK Hynix, the world's top two makers of memory chips, have invested billions of dollars in chip factories in China

"It takes huge amounts of pre-emptive investment to be a chipmaker, and it takes five years, 10 years to break even on those investments, so putting predictability into jeopardy makes investments difficult," an analyst said

The development comes at a time when the US is increasingly urging its allies to work together to counter China's chips and advanced technology development