US chip still dependant on China despite restrictions
Huge demand for manufacturing equipment exists.
American manufacturers struggle to disengage from the Chinese market due to the country's high demand for equipment.
This is despite the US government's imposed restrictions two years ago on the export of advanced chips and chip manufacturing equipment used in the production of semiconductors, to contain China's semiconductor development.
China's speedy growth in chip manufacturing has also generated a huge demand for various equipment.
"Whilst the US is also building factories, their efficiency is lower and they do not have as much growth space. From this perspective, demand in the Chinese market is high, and American manufacturers are certainly eager to sell to China," Xiang Ligang, a telecom industry expert based in Beijing.
Global wafer fab equipment sales are expected to increase by 3.4% year-on-year in 2024 to reach a new record of US$109b in 2024, according to a report from Semiconductor Equipment and Materials International.
Additionally, China is investing heavily in the chip sector, launching new chip-related indices on the Shanghai Stock Exchange. This demonstrates China's commitment to the semiconductor industry and presents new opportunities for investment in the market.
Chinese exports make up over 40% of total sales for these companies, indicating the globalised nature of the semiconductor industry.
China made up 43% of sales at Applied Materials from February to April, up 22 points on the year.
China's share of sales at Lam Research rose 20 points to 42% for the January-March period.
This is contrary to Washington's plans under export kerbs that aim at China.
