A worker produces chips at a semiconductor manufacturing enterprise in Binzhou, China, on June 4, 2024.
Nurphoto | Nurphoto | Getty Images
BEIJING — Four of the world’s largest semiconductor equipment manufacturers, including ASML, have seen the share of their China revenue more than double since late 2022, Bank of America analysts said in a report Monday.
“China accelerated its purchase of semi manufacturing equipment since the U.S. imposed tighter export restrictions in October 2022, aiming to develop its own semi manufacturing capability,” the report said.
The BofA analysis looked at Lam Research, ASML, KLA Corp. and Applied Materials.
The research found the companies’ China revenue more than doubled from 17% of their total revenue in the fourth quarter of 2022 to 41% in the first quarter of 2024.
“Tech, especially semi, is at the center stage of trade tensions with China, which could be more at risk if tensions further escalate from here,” the report said.
The U.S. in October 2022 started imposing sweeping export controls on U.S. sales of advanced semiconductors and related manufacturing equipment to China. Last week, Bloomberg reported, citing sources, that the Biden administration was considering broader restrictions on semiconductor equipment exports to China that could affect non-U.S. companies.
Beijing, meanwhile, has sought to bolster its tech self-sufficiency, a goal top leaders reaffirmed at a key policy meeting last week.
The VanEck Semiconductor ETF (SMH), which tracks U.S.-listed chip companies, has fallen in the last week but is still holding gains of nearly 46% for the year so far.
In conclusion, the escalating tensions in the semiconductor industry have led to a significant increase in China’s purchase of semiconductor manufacturing equipment. The shift in focus towards self-sufficiency in technology has prompted Chinese companies to invest heavily in developing their semiconductor capabilities, driving up revenue for the world’s largest equipment manufacturers. As trade tensions continue to rise, the semiconductor sector remains at the forefront, facing potential risks and challenges.
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