As export curbs from US allies are expected to take effect soon, China has imported a record amount of semiconductor equipment.
The value of chip fabrication tool imports in June and July hit nearly $5 billion, up 70 percent from the $2.9 billion recorded in the same period last year, according to data from Chinese customs that was cited by the Financial Times.
The United States and its allies have put export restrictions on chipmaking equipment in the Netherlands and Japan to slow China's technological development.
Chinese chipmakers are worried because these regulations will require them to buy licenses from the Dutch and Japanese governments in order to use certain tools.
Even though it's unclear how much of the increased imports relate to equipment subject to these restrictions, China's purchases show that the country wants to make sure its plans to enhance chip production don't get derailed.
China plans to use the imported machinery to increase manufacture of lower-end chips, which are not subject to Western limitations. The export bans in the Netherlands and Japan are likely behind this strategic shift.
Semiconductor Manufacturing International and Yangtze Memory Technologies are two of the most prominent Chinese chip manufacturers, and both rely significantly on machinery made in the United States, the Netherlands, and Japan. Equipment like lithography and etching machines used in chip fabrication are included in the category of "tools" in the customs data.
According to the research, the increased deliveries of lithography machines from ASML, a major chipmaking equipment producer, are substantially responsible for the doubling of Chinese imports of Dutch chipmaking equipment in June and July compared to May. The demand for equipment to produce less cutting-edge circuits is high in China, according to ASML CEO Peter Wennink. After the United States tightened export regulations on semiconductor equipment in 2020, China increased its acquisitions of Japanese etching equipment and wafer-coating devices.
In line with Beijing's ambitions to increase domestic chipmaking capabilities, recent imports of machinery have also been channeled to newly founded tiny foundries funded by local Chinese governments. China's increased imports from Singapore and Taiwan can be attributed in part to the country's increasing purchases of chip equipment from outside.
China's efforts to maintain manufacture of less advanced semiconductors despite constraints faced by tougher export regulations are highlighted by this rise in imports.
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