Catch up before sanctions China increased purchases of chip production equipment

Catch-up before sanctions: China increased purchases of chip production equipment by 70%

According to the information Financial TimesReferring to statistics from Chinese customs officials, Chinese companies imported semiconductor component manufacturing equipment to Heaven for a record $5 billion in June and July, up 70% from the same period last year. Buyers of this equipment attempted to import it before new export restrictions imposed by the US and its allies.

    Image source: ASML

Image source: ASML

Most of the equipment brought into China in the first two months of the summer came from Japan and the Netherlands as US authorities put pressure on those countries to step up efforts to limit shipments. Keep in mind that buyers of certain types of Japanese equipment will need to obtain special licenses for their shipment to China from July 23, and such restrictions from the Netherlands will come into effect on September 1. It goes without saying that in June and July Chinese manufacturers tried to buy as much equipment as possible until the new restrictions took full effect.

Chinese semiconductor component makers continue to rely heavily on supplies of equipment from the US, Japan and the Netherlands for their activities, and the former’s allies are using this to politically curb China’s technological development. It is noteworthy that the purchase of materials and components for the production of chips is not listed under an item with equipment in the statistics of the Chinese customs authorities, although local manufacturers rely heavily on imports in this area.

According to unofficial data, imports of lithography equipment from the Netherlands to China doubled in June and July compared to May this year. The largest provider of lithography scanners on the world market is ASML, headquartered in the Netherlands. Deliveries to China of advanced scanners for working with EUV lithography were already blocked by the Dutch authorities in 2019, even before there were corresponding bans from the USA. However, less advanced devices from this brand continue to be in high demand in China.

Chinese chip manufacturers mainly bought devices for etching and cleaning silicon wafers from Japan. Some of these devices were previously bought in the US, but since 2020 export restrictions from US suppliers have increased and Chinese customers have switched to Japanese counterparts.

Some of the equipment purchased over the summer went to Chinese companies, which, according to insiders, are being set up with the active participation of local authorities. The volume of equipment imports from Singapore and Taiwan to China also increased quite significantly. Five of the world’s top lithography equipment suppliers increased shipments to China by 30% in the second quarter, according to Counterpoint Research. The country needs more chips whose equipment is not yet covered by foreign sanctions. The local market requires components for electric vehicles, alternative energy systems and industrial automation.

About the author

Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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