China has purchased a near-record $40 billion worth of chip equipment to circumvent US restrictions

Imports of chip-making equipment into China jumped last year, amid companies stepping up investment in an attempt to circumvent U.S. efforts to rein in the country's semiconductor industry, Bloomberg reported, UNN writes.

Details

According to Bloomberg calculations based on official customs data, imports of equipment used to make computer chips rose 14% in 2023 to nearly $40 billion. This is the second-highest amount on record since 2015. The increase came despite a 5.5% drop in total imports last year, underscoring the importance the Chinese government and the national chip industry place on achieving self-sufficiency, the publication notes.

Imports rose 14%, amid companies stockpiling semiconductor manufacturing equipment.

Chinese chip makers are rapidly investing in new semiconductor factories to try to expand the country's capabilities and circumvent export controls imposed by the U.S. and its allies. These restrictions make it difficult for Chinese companies to access the equipment needed to produce the most powerful chips and slow the development of China's high-tech sector, which is seen as a threat to the United States.

China's imports from the Netherlands surged last year in anticipation of new export controls that will further limit the ability of companies such as Semiconductor Manufacturing International Corp. to get the latest equipment.

Lithography equipment imports from the Netherlands jumped nearly 1,000% in December from a year earlier to $1.1 billion, as companies rushed to buy ahead of the start of restrictions this month.

Supplement

Even before the restrictions took effect, Netherlands-based ASML Holding NV canceled shipments of some of its latest machines to China at the request of the U.S. government, Bloomberg reported earlier this month. The cancelations came weeks before the ban on exports of high-end chip-making equipment went into effect.