China circumvents US sanctions by buying used chipmaking equipment

China circumvents US sanctions by buying used chipmaking equipment

With the US intent to tighten restrictions on China’s semiconductor sector, local chipmakers are accelerating procurement of wafer fab equipment (WFE) to keep their factories running smoothly. At the same time, Chinese companies prefer to conduct these transactions in secret, as some of them are conducted in violation of Washington sanctions. informed DigiTimes resource.

    Image source: Intel

Image source: Intel

According to DigiTimes sources, SMIC, HuaHong, Nexchip, Silan Microelectronics and others are buying whatever they can get, including used equipment. Also, it is forbidden to send some of the equipment to China, so the parties prefer to make such deals without publicity.

Among the active buyers of devices, Huawei stood out, which is under tough sanctions in Washington, according to which it has no right to buy devices with advanced American technologies without approval from US regulators. Huawei’s purchases are related to its plans to build a factory with the support of SMIC, so the company wants to get as much equipment as possible for outfitting.

The sanctions ban the supply of devices for manufacturing chips with the 14nm process technology and more advanced manufacturing technologies to China. DigiTimes noted that only SMIC can make chips using these technologies, so current restrictions in Washington are only critical for most Chinese chipmakers in the long term.

However, the US is in talks with Japan and the Netherlands, which also have major lithography equipment manufacturers, to agree on measures to further restrict exports of semiconductor technology and equipment to China. Because of this, Chinese companies have accelerated the purchase of equipment and components.

Since it is not currently known exactly which pieces of equipment are subject to export restrictions, Chinese companies buy almost everything needed to expand capacity and/or maintain ongoing production.

Among the beneficiaries of tougher sanctions against Chinese semiconductor companies will be Taiwanese equipment makers, which are operating at full capacity and have orders for shipments to China as early as 2025.


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Dylan Harris

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

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