China Actively Buys Chip Gear to Beat US Curbs

In 2023, there was a significant increase in the volume of imports of equipment necessary for the production of microcircuits to China.

China Actively Buys Chip Gear to Beat US Curbs

The mentioned trend is explained by the fact that many companies have begun to actively invest in the specified equipment as part of attempts to circumvent the restrictive measures of the United States aimed at curbing the national semiconductor industry of the Asian country. Washington’s relevant decisions have already caused Chinese companies to lose access to advanced foreign chips.

According to official customs data, imports of equipment used in the microcircuits manufacturing process by Beijing increased by 14% last year compared with the result of 2022. In monetary terms, the supply of the specified equipment to China in 2023 amounted to almost $40 billion. This indicator is the second largest in terms of value in the entire history of observations, starting in 2015.

An increase in the supply of chip manufacturing equipment to China was recorded, despite a decrease in the country’s total imports by 5.5% in 2023. Against this background, there is a clear focus of the government of the Asian state on the development of the national industry of making microcircuits, the purpose of which is to achieve full sovereignty in this production area.

Currently, Chinese chip companies are actively investing in new semiconductor plants. These efforts are aimed at expanding China’s manufacturing capabilities and reducing the impact of restrictive measures from Washington, which were supported by American allies. Companies from the Asian country face difficulties accessing the equipment needed to make the most powerful chips. Against this background, there is a risk of a slowdown in the Chinese high-tech sector, which is identified by Washington as a threat.

Last year, the volume of imports of the Asian country from the Netherlands, where ASML, the world’s largest manufacturer of equipment for making chips, is based, increased sharply. Chinese companies have stepped up to create a kind of base for subsequent activities in the sphere of microcircuit production. Firms such as Semiconductor Manufacturing International Corp. were preparing to lose the opportunity to buy advanced equipment.

Last December, the volume of shipments of lithography equipment from the Netherlands to China increased by 1000% compared to 2022, amounting to $ 1.1 billion. This sharp increase is because Chinese companies have become more aggressive in buying products before completing their exports to the Asian country in the current month.

Even before the originally scheduled date for the cessation of equipment supplies to China, ASML, at the request of the United States Government, stopped the supply of some of its top-of-the-line machines to Beijing. The relevant decision was made a few weeks before the start of the ban on the export of high-quality equipment for the production of microcircuits.

A spokesman for the Chinese Foreign Ministry in early January described Washington’s actions as an act of hegemony and called on the Dutch government to respect the spirit of the contract and world order to guarantee the mutual benefit of the two countries.

As we have reported earlier, China’s Factory Activity Picks Up.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.