Revenue from China’s top chip equipment makers surged in the first half of the year, research released Thursday showed, as Beijing continues to aim for self-reliance for its semiconductor industry.
The top 10 domestic equipment manufacturers logged revenue of around 16.2 billion Chinese yuan ($2.2 billion) in the first half of the year, up 39% year-on-year, according to Shanghai-based CINNO Research.
Semiconductors — critical components that go into everything from smartphones to satellites — have been caught up in the broader technology battle between the U.S. and China.
Washington has sought to use export restrictions to cut off Beijing from key semiconductor equipment and technologies.
The chip supply chain is incredibly complex and made up of numerous companies, ranging from sellers for design tools for semiconductors to firms involved in manufacturing and relevant machinery.
China’s domestic semiconductor industry has previously heavily relied on foreign companies for these tools, leaving Beijing’s industry behind the likes of the U.S., South Korea and Taiwan.
Since 2019, U.S. sanctions on Chinese technology firms such as Huawei and China’s biggest chipmaker SMIC, has forced Beijing to boost its domestic industry and seek more self-reliance and wean itself off foreign technology.
That has underpinned the boost in revenues for China’s domestic chip equipment manufacturing firms.
CINNO names Naura Technology Group Co. as the top Chinese semiconductor equipment maker by revenue. The company produces tools required in the chip manufacturing process. Naura operating revenue in the first half of they ear stood at more than 7 billion yuan, up 68% year-on-year and outpacing other companies, CINNO said.
The second-largest Chinese domestic player is Advanced Micro-Fabrication Equipment Inc. China (AMEC), which makes machines required for the semiconductor manufacturing process. Revenue rose 28% year-on-year to 2.53 billion yuan in the first half of the year, CINNO said.
ACM Research is the third-biggest Chinese player. It makes cleaning and packaging equipment for semiconductors, with revenue surging 47% year-on-year in the first half of the year to 1.61 billion yuan.
Still, China lacks access to some of the most advanced chipmaking tools around. For example, Dutch firm ASML makes a chipmaking tool called an extreme ultraviolet lithography machine — one of the costly instruments required to make the most advanced chips around. But ASML has been restricted by the Dutch government from exporting these machines to China.
Those restrictions, in addition to concerns about further tensions with the U.S., are one reason why Beijing has turned to its domestic firms. However, it appears China’s semiconductor industry is making some progress toward more advanced chips, even in the face of U.S. sanctions.
Huawei quietly launched a new smartphone this month, which can connect to next-generation 5G mobile networks, despite U.S. sanctions that aimed to cut the Chinese tech giant off from this technology. That’s thanks to a chip that appears to be manufactured by SMIC — which has surprised because it is a more advanced piece of technology than many had thought the company could produce.