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[News] A Quick Recap: Impact of the Latest U.S. Chip Export Curbs on China and Global Semiconductor Giants
A new round of U.S. export crackdown on China’s semiconductor industry has been kicked off on Monday. As the new measures include export bans targeting roughly 140 companies, concerns have been raised about whether China would still be able to make advancements in the domain.
However, according to local media outlets ijiwei and icsmart, many of the Chinese firms in the Entity List had made preparations in advance, as a large number of key components are sourced domestically. Therefore, short-term impact will be limited, as per the reports.
Key Components Gradually Localized
According to ijiwei, the newly added companies are mostly semiconductor equipment companies, along with some software firms.
As per ijiwei, the semiconductor manufacturing equipment companies sanctioned by the U.S. include China’s leading chip equipment maker Naura Technology Group, Piotech, Shanghai-based Kingstone Semiconductor and ACM Research, Skyverse, Hwatsing, and Kingsemi. The companies’ products cover most areas of semiconductor equipment, including photoresist coating, etching, thin film deposition, CMP, packaging and testing, etc, as noted by ijiwei.
These entities also include semiconductor material companies like Quanjiao Nanda Optoelectronic Materials. In addition, research institutions and investment firms, such as Chinese Academy of Sciences Institute of Microelectronics and Wise Road Capital, have also been included. Read below for a quick recap of the companies’ responses:
(credit: ijiwei, ASML, Lam Research)
Citing comments from CITIC Securities, ijiwei indicates that the latest U.S. sanctions continue to follow the “small yard, high fence” strategy focused on advanced processes. Though the short-term impact will be limited, in the long run, China will need to focus on self-reliance, while keep accelerating the domestic production across the entire semiconductor supply chain.
Limited Impacts on China’s EDA Industry
Another report from icsmart notes the sanctions may have limited impact on China’s domestic EDA giant, Huada Jiutian, as the core of EDA software lies in talent, and the demand for U.S. products is relatively small.
On the other hand, icsmart suggest that SwaySure Technology, Si’En Qingdao and Shenzhen Pengxinxu Technology may be among the most affected, as the inability to obtain semiconductor equipment and components from the U.S., Japan, and the Netherlands could significantly impact the operations of their factories in the future.
It is worth noting that Advanced Micro-Fabrication Equipment Inc. China (AMEC), one of China’s leading chip equipment makers, has not been included in the Entity List, as noted by the report.
The company has been working on the localization of components for a while. Citing chairman Gerald Yin, icsmart notes that currently, 60% of the components for AMEC’s etching machines are sourced domestically, while the domestic procurement ratio for components in MOCVD equipment is as high as 80%. However, around 20-40% of AMEC’s components still rely on imports, according to icsmart.
In terms of the progress of China’s Piotech, the company’s chairman Lü Guangquan notes that Piotech’s products currently cover all the technology nodes of China’s domestic production lines, according to the report.
ASML: Impact of Updated Export Restrictions to Fall within 2025 Outlook
According to Reuters, as the rules will extend U.S. authority to limit exports of chipmaking equipment, they are expected to impact U.S. companies such as Lam Research, KLA, and Applied Materials, as well as non-U.S. firms like ASML.
According to the latest statement from ASML, it does not expect any direct material impact from the sanction in 2024. For 2025, the Dutch tech giant expects the impact will fall within what was communicated earlier in October.
ASML expects 2025 total net sales to fall between €30 billion and €35 billion (roughly USD 31.5-36.7 billion), with its China business dropping to 20% of its total net sales. In the third quarter, 2024, China contributed 47% of its total sales.
Another major chipmaking equipment giant Lam Research states that at this time, it has no plans to update the financial guidance. The company expects revenue for the current quarter at USD 4.3 billion, compared with USD 4.17 billion in the previous quarter.
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