Gaps in efforts by the US and allies to restrict China's ability to manufacture advanced computing chips have allowed China to buy $38 billion of sophisticated chipmaking gear.
Inconsistencies in rules issued by the US, Japan and the Netherlands have led to non-US toolmakers selling to some Chinese firms that US companies could not.
Chinese firms last year bought $38 billion in equipment from five top semiconductor manufacturing equipment suppliers, without breaking the law, a 66% increase from 2022, when many of the tool export restrictions were introduced. It also accounted for nearly 39% of the aggregate sales of Applied Materials, Lam Research, KLA, ASML and Tokyo Electron.
Three Chinese firms that have become major customers of toolmakers — SwaySure Technology Co, Shenzhen Pengxinxu Technology Co and SiEn (Qingdao) Integrated Circuits Co — are of particular security concern. They have ties to a secret network aiding Huawei, and US officials barred exports to them in Dec.
“China is attempting to rewrite the entire supply chain. What used to be niche tool segments are now battlegrounds.”
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