Chinese manufacturers of chip systems boasted that the US was late with new sanctions

A new package of US sanctions against the Chinese semiconductor sector, which US authorities called a “climax”, was largely aimed at manufacturers of equipment for producing chips. The Chinese companies targeted by these sanctions were not affected by surprise, and even admitted that they had stocked up on the necessary equipment in advance.

Image Source: SMIC

At least, this information is contained in the Reuters publication, which is dedicated to this problem. Among the nearly 140 companies whose activities are affected by the new sanctions are large suppliers of equipment for the production of chips, such as Naura Technology or ACM Research, and developers of software for designing chips and technological equipment. In the latter case, Empyrean said that the new sanctions would have little impact on its activities, and would only push it to create software for the design and production of chips, covering all stages of the production cycle.

In general, Chinese chip equipment manufacturers expressed their readiness to accelerate import substitution or reported that they have a sufficient amount of imported equipment for a long and fruitful operation. Some manufacturers of such equipment have stated that they have already completely managed to get rid of dependence on imports.

The stock market did not react strongly to the new US sanctions, as they turned out to be less stringent than expected. In addition, investors realized that Chinese companies would have to invest more money in their development and better cover the local market. According to Jefferies experts, next year the capital expenditures of the Chinese semiconductor industry will decrease by a total of 30% to $35 billion. At the same time, Chinese manufacturers have managed to create a stock of equipment for the near future, which will allow them to operate as before even after the imposition of sanctions.

According to Chinese customs, imports of equipment for chip production in the first nine months of this year increased by a third to $24.12 billion. In their current form, the new sanctions have not particularly worsened the situation with Chinese companies’ access to imported equipment, since advanced solutions are no longer available to them for a long time , and in the more mass segment, no serious additional restrictions arose.

It is noteworthy that the largest Chinese RAM manufacturer CXMT does not stand out at all in the new set of US sanctions. The company is generally believed to be making attempts to organize the production of HBM2 memory in China, but the US authorities apparently consider this threat to their national security to be illusory. CXMT retains the opportunity to purchase equipment for its needs in South Korea. Mirae Corp, for example, has signed orders with CXMT totaling $6.41 billion this year, and in the first half of the year this Chinese client accounted for about 15% of its total revenue. Let us recall that the new US sanctions also do not prohibit foreign companies from organizing packaging and testing of HBM family memory chips in China.