Biden has been trying to restrict Japanese companies from supplying high-end chip-making equipment to China.
TEAF found that demand for semiconductor equipment in China has surged, and the impact of restrictions in the United States and Japan banning the sale of cutting-edge chips and chip-making equipment to China has been less than expected. Tokyo Electron generated 43% of its sales in China last quarter, up from 24% last year.
Another Japanese equipment maker, Kokusai Electric Corp., is also expanding its operations in China to meet the expected increase in demand. CEO Fumiyuki Kanai**, China will account for between 40% and 50% of the company's revenue. Investments in memory, logic, and power chips are expected to be concentrated at 28nm and beyond.
***pexels
Japan lags behind Taiwan and South Korea in chip manufacturing, but is a major producer of machinery used to make chips. Earlier this year, Japan and the Netherlands, another major producer of chip-making equipment, agreed to join the United States in restricting sales of cutting-edge chip-making equipment to China.
The U.S. imposes restrictions on more advanced semiconductors, and China is investing in traditional chips. Many devices use mature chips larger than 28 nanometers, while high-end consumer electronics and data centers rely on cutting-edge chips made by companies such as TSMC, Intel, and Samsung. International Business Strategies, a consulting firm, estimates that the 28-nanometer chip market will be worth $28 billion by 2030.
The U.S.** allowed TSMC, Samsung, and SK hynix to continue to leave equipment to their Chinese chip factories indefinitely in mid-October. Analysts say the U.S. may want to retain some foreign power in China's chip industryIf foreign companies leave, demand will shift to local Chinese companies, reducing the ability of the United States to control and inspect the Chinese market.