Chinese Semiconductor Firms Stockpiling Equipment Amid Tighter Export Rules
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Chapter 1: Context of Stockpiling
In light of impending stringent export regulations, Chinese semiconductor manufacturers are amassing chip production equipment, components, spare parts, and essential materials to sustain their operations. Reports from the South China Morning Post indicate a significant rush to acquire unusually large quantities of components before access becomes limited due to export restrictions.
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Section 1.1: Scale of Orders
Sources familiar with the situation have revealed that a prominent semiconductor firm in Beijing has already “filled several large warehouses” with various materials and components. The orders being placed extend beyond semiconductor products listed under US export controls, reflecting concerns over potential “greater restrictions in the future.”
Subsection 1.1.1: The Japanese Component Market
A source in Tokyo, responsible for handling Japanese component orders for Chinese clients, confirmed that businesses are “overbuying” to safeguard their production schedules against any disruptions stemming from export regulations. New restrictions from Japan are anticipated, but companies are currently awaiting further guidance expected by April.
Section 1.2: Shifts in Technology Development
Due to US sanctions, China lacks access to cutting-edge chip manufacturing technologies, prompting a shift in focus towards the development of RISC-V chips. However, this transition necessitates extensive research and development over the coming years. In the meantime, Chinese companies must continue producing the chips they are capable of, which explains the current stockpiling strategy.
Chapter 2: Implications of Export Restrictions
The apprehension regarding increased export restrictions is justified, given recent events that may provoke further actions from the US government. Notably, Huawei was discovered attempting to circumvent US sanctions, and there was the incident involving a Chinese spy balloon. Additionally, just last week, seven former Samsung employees were sentenced for stealing chip-related secrets for China. Furthermore, a former employee of ASML is under investigation for alleged connections to the Chinese government after reportedly stealing sensitive data from the chip manufacturer.
The video titled "China's chip equipment makers won't catch up in the foreseeable future, research firm says" delves into the challenges faced by Chinese semiconductor firms amidst tightening restrictions and their potential inability to catch up technologically.
The second video, "China is having to build a semiconductor industry from old machines, analyst says," discusses how China is relying on outdated technology to develop its semiconductor industry in response to export limitations.