Get Free Semiconductor Updates

China’s imports of semiconductor equipment have surged to record highs ahead of US allies imposing export restrictions.

Chinese customs data showed that the country’s chip production tool imports in June and July totaled nearly $5 billion, up 70 percent from $2.9 billion in the same period last year.

Most imports came from the Netherlands and Japan, two countries that have imposed export restrictions on chipmaking equipment as they work with the US to slow China’s technological advances.

The restrictions mean buyers of some tools will have to apply for licenses from the Dutch and Japanese governments, raising concerns among Chinese chipmakers. Japan started enforcing its restrictions on July 23, while Dutch restrictions will come into effect on September 1.

While it’s not clear to what extent the surge in imports can be attributed to tools subject to the restrictions, the purchases suggest China wants to avoid disruption to its plans to expand chip production.

With the imported equipment, Chinese companies are trying to build up production of less advanced chips that don’t fall under Western restrictions.

“This is one of China’s reactions to the…”. . Export restrictions in the Netherlands and Japan,” said Lucy Chen, vice president of Taiwan-based research firm Isaiah Research. “China has increased its inventory of semiconductor equipment through pre-stocking to mitigate potential supply chain bottlenecks.”

You see a snapshot of an interactive graphic. This is most likely because you are offline or JavaScript is disabled in your browser.

Chinese corporations such as Semiconductor Manufacturing International and Yangtze Memory Technologies depend on equipment from the USA, the Netherlands and Japan for the production of chips.

The tools category in customs data includes equipment such as lithography and etching machines for chip production, but does not include components and materials such as wafers.

Chinese imports of Dutch chipmaking equipment doubled in June and July from May, driven by the delivery of more lithography machines to ASML’s Chinese customers, said industry insiders familiar with equipment sourcing in the country. ASML is one of the largest manufacturers of chip fabrication equipment.

ASML CEO Peter Wennink said in a conference call on the results last month that there has been strong demand from Chinese customers for tools to make advanced or less innovative chips. ASML declined further comment.

Imports from Japan have also increased. Some Chinese companies started buying etching equipment and wafer coating machines from Japanese companies after the US began tightening export controls on chip equipment in 2020.

You see a snapshot of an interactive graphic. This is most likely because you are offline or JavaScript is disabled in your browser.

Some of the machines imported in recent months have gone to newly established small foundries supported by local governments in China as Beijing works to expand its chip-making capacity, two government officials familiar with the situation said.

China’s purchases of chip equipment elsewhere, including Singapore and Taiwan, have also contributed to record imports from those countries.

The surge underscores China’s attempt to keep expanding production of less advanced chips despite challenges from tightened export controls, experts said.

According to technology market research group Counterpoint, shipments from the top five chip manufacturing equipment suppliers to China increased by 30 percent in the second quarter of this year.

“China’s concentrated investment in strategic [fabrication plants] serves to ensure local supply, while sustained commitment to mature technologies serves as a buffer against geopolitical uncertainties,” said Ashwath Rao, Senior Research Analyst at Counterpoint.

Rao said China produces chips for use in electric vehicles, green energy transition and industrial applications that only require older chips that are not subject to export controls.

Additional reporting by Tim Bradshaw in London

Source :

Leave a Reply

Your email address will not be published. Required fields are marked *