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China Has Been Buying Used Semiconductor Manufacturing Equipment At A Higher Rate In An Attempt To Avoid US Restrictions

TSMC and Samsung are two of the largest semiconductor manufacturers in the entire world and enjoy the benefits of being trade partners with US-based companies like Apple, Nvidia, AMD, and many others. On the other side of the fence is SMIC. SMIC has been out of favor with the US government as they are the largest semiconductor manufacturer in China and have found operating in the current economic climate to be quite difficult.

A 20% Jump In Semiconductor Purchases From 2019 And An Even Bigger Jump Is Expected This Year

As the largest semiconductor manufacturer in China, they have been subject to any sanctions from the US government and the latest one is being added to the Entity List in December 2020. This is just the latest of the struggles SMIC has had to deal with and this time, it makes buying American-developed technology from other businesses even harder. The businesses profiting from this are Japanese used chip-making equipment sellers.

China Has Been Buying Used Semiconductor Manufacturing Equipment At A Higher Rate In An Attempt To Avoid US Restrictions

Nikkei Asia has reported that used products normally in stock are now going out of stock at a rapid rate causing price increases for almost all equipment. According to Nikkei Asia, lithography systems have tripled in value and so have other systems critical to manufacturing semiconductors. One of their sources from Mitsubishi UFJ Lease & Finance said:

“Nearly 90% of used machines appear to be headed to China.”

Another anonymous source who is an unidentified used equipment dealer claimed:

“Machines that were basically worthless several years ago are now selling for 100 million yen [$940,000]."

It's not surprising to see this mass exodus of used manufacturing equipment going from Japan to mainland China. Some say it's being hoarded just because it may prove useful in the future, but this is ultimately part of China's plan to become self-sufficient. The Japanese businesses selling the equipment are making a lot of money on equipment that otherwise would sit on shelves. To put this into perspective, Bloomberg reported that:

“Chinese businesses bought almost $32 billion of equipment used to produce computer chips from Japan, South Korea, Taiwan and elsewhere”

The report says that this is a 20% increase from the previous year (2019). The amount of used equipment sold looks to be rising and will increase over the next few years. As for getting new American-technology, it's nearly impossible for SMIC to get any as they're on the Entity List.

All of this is part of China's plan to become self-sufficient in regard to its semiconductor manufacturing. China has already been working on developing its own GPU, CPU, and memory, but they aren't prepared to move away from American technology yet.

The post China Has Been Buying Used Semiconductor Manufacturing Equipment At A Higher Rate In An Attempt To Avoid US Restrictions by Alex Casas appeared first on Wccftech.



source https://wccftech.com/china-has-been-buying-used-semiconductor-manufacturing-equipment-at-a-higher-rate-in-an-attempt-to-avoid-us-restrictions/

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