New US anti-Chinese sanctions turned out to be softer due to Japanese chip machine manufacturers

U.S. Commerce Department officials have called the recent round of sanctions against China’s semiconductor industry a “highlight” because they primarily target chip-making equipment makers. Chinese industry is not so self-sufficient in this regard, but Japanese companies managed to defend their interests in trade with China, as an analysis of the situation shows.

Image source: Tokyo Electron

The South China Morning Post reports that the list of Chinese companies and types of equipment subject to US sanctions was formed taking into account the interests of Japan. In turn, such priorities were lobbied at the national government level by Tokyo Electron, which in the first half of the current fiscal year, which began in April, was 45% dependent on the Chinese market in terms of revenue. The current sanctions allow the Japanese company to make good money in the Chinese market, and it has made every effort to maintain the status quo in this area.

It is noteworthy that the main Chinese client of Tokyo Electron, the company CXMT, which is the largest national manufacturer of RAM chips and is attempting to launch the production of HBM2, which is complex by local standards for computing accelerators, was not included in the US sanctions list. Initially, as the source notes, US authorities wanted to add CXMT to the 11 Huawei suppliers that were sanctioned this month. Only pressure from Japan forced the US authorities to delist CXMT.

Let us recall that the new US sanctions cover 24 types of equipment for the production of chips and three types of software, and the sanctions list included 140 Chinese companies with which those equipment suppliers that use components or technologies of American origin are prohibited from doing business. Restrictions are even imposed on the supply of equipment to China from Malaysia, Singapore, Israel, Taiwan and South Korea. In this regard, Japan and the Netherlands have avoided increased export controls by the United States, but the authorities of the latter country are counting on some kind of solidarity from their allies on this issue.

However, US sanctions prohibit the supply of HBM family chips with a certain level of performance to China, and equipment for etching chips, which allows the formation of interlayer connections necessary for creating vertical stacks of HBM memory, is also banned.