Some of the major Chinese chipmakers are actively buying US-made fab equipment in bulk due to rising tension between the world’s two largest economies, TheElec has learned.
The US Department of Commerce has been running what it calls an Entity List since 2018 that prohibits listed Chinese companies from purchasing US-made chip technologies. The list includes foundry SMIC and DRAM maker JHICC.
These companies aren’t able to purchase fab equipment for below 10nm nodes made by US companies Applied Materials, Lam Research and KLA, some of the world’s largest fab equipment.
US had also limited Netherlands’ ASML from exporting its extreme ultraviolet equipment that is needed for below 7nm chips to China.
Multiple people working at China employed by South Korean chipmakers told TheElec that many companies there are buying US-made fab equipment frantically due to concerns over further limitations in the future from the ongoing US-China tensions.
One Chinese company canceled its purchase from an alternative supplier to its US one that it has been preparing from the tension when it had the chance to import the US-made original ones, they said.
This shows the current atmosphere among Chinese chipmakers, that they should buy many US-made fab equipment as possible when they can, they added.
Most semiconductor production in China uses legacy processes such as deep ultraviolet equipment for over 28nm nodes.
This meant the impact of US sanctions would have been minimal but China is strongly pushing the development of its chip industry and more Chinese companies are seeking to develop advanced nodes, which in most cases involve some US chip technologies.
According to Chinese IT media eeFocus, which collected data from the local customs authority, during the first half of 2022, China imported US$18.854 worth of fab equipment.
It bought the most from Japan, US$4.883 billion worth, followed by US’ US$3.65 billion. While US import dropped 4% compared to the same time period in 2021, the data indicates that import is still going overall solid.