China Buys Near-Record $40 Billion of Chip Gear to Beat US Curbs

[Daniel Nenni]

China Buys Near-Record $40 Billion of Chip Gear to Beat US Curbs

(Bloomberg) -- China’s imports of chipmaking machines jumped last year as firms ramped up investment in an attempt to get around US-led efforts to hobble the nation’s semiconductor industry.

Imports of the machinery used to make computer chips rose 14% in 2023 to almost $40 billion — the second largest amount by value on record in data going back to 2015, according to Bloomberg calculations based on official customs data. The increase came despite a 5.5% drop in total imports last year, underscoring the importance that the Chinese government and the nation’s chip industry have placed on becoming self-sufficient.

Chinese chip companies are rapidly investing in new semiconductor factories to try and advance the nation’s capabilities and get around export controls imposed by the US and its allies. Those curbs are making it harder for Chinese companies to get access to the machines needed to make the most powerful chips — and slowing the development of China’s high-tech sector, which is seen as a threat to the US.

China’s imports from the Netherlands soared last year ahead of new export controls, which will further limit the ability of companies such as Semiconductor Manufacturing International Corp. to get the latest machinery.

In December, imports of lithography equipment from the Netherlands jumped almost 1,000% from a year earlier to $1.1 billion as firms rushed to buy ahead of the start of Dutch restrictions this month.

Even before those curbs came into effect, Dutch company ASML Holding NV had canceled shipments of some of its top-of-the-line machines to China at the request of the US government, Bloomberg reported earlier this month. The cancellations came weeks before export bans on the high-end chipmaking equipment came into effect.

China Buys Near-Record $40 Billion of Chip Gear to Beat US Curbs

(Bloomberg) -- China’s imports of chipmaking machines jumped last year as firms ramped up investment in an attempt to get around US-led efforts to hobble the nation’s semiconductor industry. Most Read from BloombergTesla Sinks After Warning About ‘Notably Lower’ Growth RateUS GDP Grew 3.3% Last...

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[TBiggs]

Seems total stupidity wasting money buying what they can with little regard to where and what is needed in the years ahead.

Soon automative, and other chips will have access to 14nm and smaller as HPC and advanced mobile move to N2 and beyond opening huge depreciated fabs for legacy chips that historically resided on planar.

With scale up of chiplets the unique planar need won’t go away but be will be satisfied by much smaller legacy chips needs assembled into chiplets with advanced node

 

[mozartct]

China's behavior was a predictable consequence of CHIPS and the 10-7 sanctions. All this equipment (if used) will destabilize the market for years to come. I worry about smaller legacy players that need to be profitable (Broadcom, On, GF).

 

[Daniel Nenni]

China's behavior was a predictable consequence of CHIPS and the 10-7 sanctions. All this equipment (if used) will destabilize the market for years to come. I worry about smaller legacy players that need to be profitable (Broadcom, On, GF).

Absolutely. Not to mention the “mature“ node foundries that rely on Asia business (UMC, GF, Tower, etc…).

 

[Barnsley]

China Buys Near-Record $40 Billion of Chip Gear to Beat US Curbs

(Bloomberg) -- China’s imports of chipmaking machines jumped last year as firms ramped up investment in an attempt to get around US-led efforts to hobble the nation’s semiconductor industry.

Imports of the machinery used to make computer chips rose 14% in 2023 to almost $40 billion — the second largest amount by value on record in data going back to 2015, according to Bloomberg calculations based on official customs data. The increase came despite a 5.5% drop in total imports last year, underscoring the importance that the Chinese government and the nation’s chip industry have placed on becoming self-sufficient.

Chinese chip companies are rapidly investing in new semiconductor factories to try and advance the nation’s capabilities and get around export controls imposed by the US and its allies. Those curbs are making it harder for Chinese companies to get access to the machines needed to make the most powerful chips — and slowing the development of China’s high-tech sector, which is seen as a threat to the US.

China’s imports from the Netherlands soared last year ahead of new export controls, which will further limit the ability of companies such as Semiconductor Manufacturing International Corp. to get the latest machinery.

In December, imports of lithography equipment from the Netherlands jumped almost 1,000% from a year earlier to $1.1 billion as firms rushed to buy ahead of the start of Dutch restrictions this month.

Even before those curbs came into effect, Dutch company ASML Holding NV had canceled shipments of some of its top-of-the-line machines to China at the request of the US government, Bloomberg reported earlier this month. The cancellations came weeks before export bans on the high-end chipmaking equipment came into effect.

China Buys Near-Record $40 Billion of Chip Gear to Beat US Curbs

(Bloomberg) -- China’s imports of chipmaking machines jumped last year as firms ramped up investment in an attempt to get around US-led efforts to hobble the nation’s semiconductor industry. Most Read from BloombergTesla Sinks After Warning About ‘Notably Lower’ Growth RateUS GDP Grew 3.3% Last...

www.yahoo.com

So some equipment suppliers got a short term boost , wonder if they are adjusting projections to say that this is the norm, or they do realise this likely a one off scenario.

 

[lefty]

The restrictions have some caveats. ASML cannot sell immersion DUV machines to companies making chips of 16nm or less. So, if the company is making 40nm chips, for instance, there's no restrictions at all - ASML could sell them their most advanced DUV the NXT:2100i in theory. However, it seems that the US is changing the rules as it sees fit. It specifically revoked the licences of some entities (but we don't know who they are)

 

[Paul2]

The restrictions have some caveats. ASML cannot sell immersion DUV machines to companies making chips of 16nm or less.

This does not spread to second hand market, where transactions are less transparent, and one's chance of getting caught, and then successfully prosecuted nears zero.

Those second hand equipment dealers absolutely do realise that those companies from British Virgin Islands are SMIC. There are no semi fabs in Virgin Islands, and everybody knows that the biggest buyers of second-hand fab equipment are Chinese by far.

Russians have likely learned from Chinese, and are now refitting their fabs by importing fab gear in parts too. https://www.pravda.com.ua/eng/articles/2024/01/14/7437218/

 

[lefty]

This does not spread to second hand market, where transactions are less transparent, and one's chance of getting caught, and then successfully prosecuted nears zero.

Those second hand equipment dealers absolutely do realise that those companies from British Virgin Islands are SMIC. There are no semi fabs in Virgin Islands, and everybody knows that the biggest buyers of second-hand fab equipment are Chinese by far.

Russians have likely learned from Chinese, and are now refitting their fabs by importing fab gear in parts too. https://www.pravda.com.ua/eng/articles/2024/01/14/7437218/

DUV machines are too complicated to be installed or maintained by anyone other than ASML. I doubt that ASML would install them for unlicensed customers.

 

[Daniel Nenni]

DUV machines are too complicated to be installed or maintained by anyone other than ASML. I doubt that ASML would install them for unlicensed customers.

From what I was told there are former ASML people doing the support in China and they will cannibalize machines for spare parts. So all of these DUV machines will not be in production. And yes other countries are helping China. Hong Kong is an easy pass through.

The US will not be able to plug holes in semiconductor restrictions fast enough in my opinion. By hook or by crook, where there is a will there is a way, semiconductors are critical so leaks will happen, absolutely.

How long has North Korea been on the axis of evil? Yet they have nuclear strike abilities? North Korea could wipe out 98% of the semiconductor memory capacity but they won't. Same reason why China will not wipe out Taiwan. It would not be in the WORLD'S best interest.

 

[Paul2]

North Korea could wipe out 98% of the semiconductor memory capacity but they won't.

They would do it easily if they think they will win, with "they" being the WPK politburo, and their first circle. And under "win" may not even necessarily be a military victory.

Similarly, Russians were preparing for an invasion of Europe without delusions that you can somehow both invade EU, and still keep doing business with it.

Xi obviously realises that he can't destroy the Taiwanese economy, and have it too. It's obvious he is preparing for war, which means it doesn't bothers him.

 

[Daniel Nenni]

They would do it easily if they think they will win, with "they" being the WPK politburo, and their first circle. And under "win" may not even necessarily be a military victory.

North Korea depends on China and Russia so it is a 3-way decision. Semiconductors really are a deterrent to war. No one is going to bomb Silicon Valley . Maybe that is why everyone wants mega fabs in their backyard? Taiwan and South Korea really did it right.

Let's face it, war is a part of life, the world has a long history of it, so it is not going away. The big difference today is semiconductors. The semiconductor industry profits from war more than ever before thus the silicon shields.

Do you really think the drones coming out of Iran have Iranian silicon in them? Ai is going to make the silicon shields even stronger since you will need advanced silicon to do battle.

 

[Paul2]

No one is going to bomb Silicon Valley

On the other hand, it's a priority target. They will attempt to deny the biggest advantage Western high tech militaries have. Zero doubts about that.

When the war will see most of high-tech, high logistic footprint weapon systems fade as parts, munitions, skilled maintenance personel get scarcer (which means airforce, smart munitions, nuclear weapons), their armies based on mass use of dumb, cheap weapons will get a definite advantage.

They will probably find ways how to do without civilian GPS guided bombs, but would Western armies find a way to fight without mirroring 10 tons per minute artillery barrages, and losses of few brigades per week.