US chipmakers are increasing supplies of equipment to China, despite export restrictions

Despite export restrictions imposed by the US government, American chip manufacturing equipment manufacturers have significantly increased their shipments to China. This applies primarily to equipment for the production of obsolete chips, which are not subject to restrictions.

Image source: Copilot

China accounted for 43% of US company Applied Materials’ sales between February and April, up 22 percentage points from last year, Japan’s Nikkei Asia reported. The share of sales from Lam Research, also a US company, rose 20 points to 42% in the January-March period. Such indicators clearly run counter to Washington’s plans to limit exports to China.

Let us recall that in 2022 the United States introduced a ban on the supply of equipment for the production of advanced semiconductors to China. However, equipment for making chips for mass-produced goods was not subject to restrictions. Despite efforts to build supply chains, equipment manufacturers have been unable to reduce their dependence on the Chinese market, although the government reported at the recent Semicon West conference on the success of the $52.7 CHIPS and Science Act program. billion, while mentioning the investment plans of such technology giants as Intel, Samsung and TSMC.

US administration officials say the goal is not to sever economic ties with China, but to limit areas related to national security.

However, according to experts, the growth of exports of any equipment to China carries risks for the United States in any case, as it contributes to the development of the Chinese semiconductor industry. Moreover, Beijing has set goals for creating its own semiconductor supply chains, which in the long term could create strong competition for American equipment manufacturers.

It’s worth noting that industry association SEMI forecasts that global sales of chip manufacturing equipment will grow 3.4% to $109 billion in 2024, with China accounting for more than 30% of that volume, making the country the largest market and driver of demand.

«We have a very strong commercial relationship with China,” US Undersecretary for Economic Growth Jose Fernandez said in an interview with Nikkei. While the US will regulate areas related to national security, the goal is not to sever economic relations between the two countries, he stressed.