The United States is using all its weapons to stop China’s technological development at all costs. To do this, it has imposed various types of sanctions, such as a ban on purchasing GPUs above a certain power and all types of tariffs. Among the measures is the inability to purchase tools for manufacturing chips, but, curiously, China who is more invested In tools has semiconductors in the first half of 2024.
One of the measures the US has taken to hamper Chinese technological development is to limit its ability to acquire chip manufacturing machines. It can only buy machines for “old-school” processes above 7nm.
The idea is to stop them as much as possible to prevent them from overtaking American companies. Something that does not seem to have the expected success, since the Chinese manage to overcome all the obstacles. To achieve this, they have continued to invest enormous sums of money.
China is the largest buyer of chipmaking tools
Thanks to the latest Nikkei report, we know that China is the one that has invested the most in tools for manufacturing chips. The Chinese giant would have invested, only in the first half of 2024a huge one $25 billion. To give you an idea, that’s more than what was invested during the same period by the United States, Taiwan and South Korea combined.
According to the report, it does not seem that investments will stop in the short and medium term. Nikkei assures that Chinese investments This year could exceed $50 billion.
The big problem for the Chinese is that they do not have access to cutting-edge equipment. The United States prevents them from acquiring solutions using EUV technology, the most modern on the market. Since they do not have access to this technology, they cannot manufacture chips of 7 nm or less.
The report notes that most of the spending goes to facilities with mature chip manufacturing nodes. These so-called “second-tier” companies are the biggest spenders.
According to reports, a total of ten companies are manufacturing chips with mature nodes. Specifically, they are said to be using the 10nm, 12nm, and 16nm nodes.
As it could not be otherwise, since China is the largest buyer, it is also the main source of income for many companies. The report highlights that for Applied Materials this represents 32% of purchases, for Lam Research it would be 39% and for KLA it would be 44%. Note that all three companies are American.
In contrast, for Japan’s Tokyo Electron, this represents 49.9% of June revenue. Even 49% of Dutch company ASML’s revenue in the second quarter of 2024 comes from China.
This means that despite US restrictions, the industry is heavily dependent on the Chinese market. They point out that by 2025 there is no sign of a slowdown in Chinese investment.
For some time now, China has been working at full speed and regardless of the amount of money it spends to achieve total self-sufficiency. This suggests that massive investments will continue, as will US attempts to prevent its technological growth.
