China's top two chip-making equipment manufacturers are expecting a significant boost in profits due to the US imposing restrictions on exporting similar technologies to China. Consequently, Chinese chip producers have had to turn to domestic alternatives when acquiring equipment.
Chinese Advanced Micro-Fabrication Equipment Inc. has reported a preliminary estimate of a 110-120% increase in net profit for the first half of 2023. Similarly, Naura Technology Group Co. announced that its preliminary data suggests a 121-156% surge, amounting to $270 million, over the same period.
While Chinese equipment manufacturers in the semiconductor industry still lag behind American giants like Applied Materials Inc. and Lam Research Corp., they are rapidly expanding their research efforts. Their intention is to replace equipment that relies on US-origin components subject to sanctions. However, the shares of Naura and Advanced Micro-Fab experienced a slight decline on Monday, following disappointing data regarding the Chinese economy.
Presently, Beijing is intensifying its efforts to replace foreign technology and achieve self-sufficiency in key industries, particularly semiconductors. The US-led campaign to hinder China's access to crucial semiconductor technologies has prompted the Chinese government to prioritize building a localized supply chain for this sector. The aim is to mitigate the adverse effects of anti-China sanctions by ensuring a secure semiconductor supply for the nation's economic development.
China is currently facing immense pressure in the semiconductor industry. Just recently, it was revealed that ASML, a Dutch chip manufacturing equipment provider, may face a ban on supplying advanced semiconductor production equipment to China. Furthermore, repairing previously purchased equipment is also at risk, despite these purchases having been made through entirely legal means.
