The United States is using all its weapons to stop China’s technological development at all costs. To do so, it has imposed different types of sanctions, such as preventing the purchase of GPUs above a certain power and all kinds of tariffs. Among the measures is the impossibility of buying tools to manufacture chips, but, curiously, China is who has invested more in tools for semiconductors in the first half of 2024.
One of the US measures to impede Chinese technological development is to limit their ability to acquire machines to manufacture chips. They can only purchase machines for “old-fashioned” processes above 7 nm.
The idea is to slow them down as much as possible to prevent them from overtaking American companies. Something that does not seem to be having the expected success, since the Chinese are managing to overcome all the obstacles. To do so, they have not stopped investing huge amounts of money.
China is the largest buyer of chip manufacturing tools
Thanks to the latest Nikkei report, we know that China has been the one who has invested the most in tools to manufacture chips. The Chinese giant would have invested, only in the first half of 2024a whopping $25 billion. To give you an idea, this is more than what was invested in the same period by the United States, Taiwan and South Korea combined.
According to the report, it does not seem that investment will cease in the short and medium term. Nikkei assures that China’s investment This year could overcome the $50 billion.
The Chinese have a big problem: they do not have access to cutting-edge equipment. The United States prevents them from acquiring solutions that use EUV technology, which is 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 the bulk of spending is going to facilities with mature chip manufacturing nodes. These so-called “second-tier” companies are spending the most.
According to reports, there are a total of ten companies that are manufacturing chips with mature nodes. Specifically, they are using the 10nm, 12nm and 16nm nodes.
As expected, China is the largest buyer and is also the main source of income for many companies. The report highlights that for Applied Materials it represents 32% of purchases, for Lam Research it would be 39% and for KLA it would be 44%. It should be noted that these three companies are American.
For Japan’s Tokyo Electron, on the other hand, it accounts for 49.9% of June’s revenues. Even 49% of Dutch ASML’s Q2 2024 revenues come from China.
Despite US restrictions, the industry is still heavily dependent on the Chinese market, they say. They point out that there are no signs of a slowdown in Chinese investment by 2025.
China has long been working at full speed and regardless of the amount of money spent to achieve complete self-sufficiency. This suggests that massive investments will continue, as will US attempts to impede its technological growth.