Gaps among US and allied export restrictions have allowed Chinese companies to purchase nearly $40 billion worth of advanced semiconductor manufacturing equipment, essentially hitting the efforts to limit Beijing’s chipmaking capabilities, according to a bipartisan congressional investigation.According to news agency Reuters, the report by the US House of Representatives Select Committee on China found that misaligned rules among the US, Japan, and the Netherlands enabled non-American toolmakers to sell equipment to Chinese firms that US companies were prohibited from supplying.
China bought chipmaking tools from 5 suppliers
According to the report, Chinese companies purchased $38 billion in equipment from the five largest semiconductor manufacturing suppliers last year—a 66% increase from 2022, when many export restrictions were first implemented. Those sales represented nearly 39% of combined revenues for Applied Materials, Lam Research, KLA, ASML and Tokyo Electron, the report found.“These are the sales that made China increasingly competitive in the manufacture of a wide range of semiconductors, with profound implications for human rights and democratic values around the world,” the report stated.
Why US has restricted export of advanced chips to China
Both Democratic and Republican administrations have sought to restrict China’s access to advanced chip technology, viewing the semiconductor industry as critical to national security. Advanced chips are essential for AI development and military modernisation – areas where the world’s two largest economies are competing for technological supremacy and global influence.The congressional committee called for broader, coordinated restrictions on chipmaking tool sales to China rather than targeting specific Chinese companies with narrower bans.Mark Dougherty, president of Tokyo Electron’s US unit, said in an interview that industry sales to China have begun declining this year, partly due to new regulations. “I think it’s clear, from a U.S. perspective, there’s an outcome that is still desired that has not yet been achieved,” Dougherty told Reuters.
