US Takes Chip Equipment Makers To Task Over China Sales

US lawmakers have written to the world’s biggest providers of semiconductor manufacturing technology to ask for information on their sales to China, ahead of expected further rounds of US export controls on such technologies.

Republican John Moolenaar and Democrat Raja Krishnamoorthi, the heads of the House China select committee, sent letters to American chip equpment firms Applied Materials, Lam Research and KLA, along with the Netherlands’ ASML and Japan’s Tokyo Electron.

They said the requested information would “help us better understand the flow” of semiconductor manufacturing equpment to China.

They argued companies are continuing to contribute to China’s “rapid buildout” of its chip manufacturing base, helping it supply chips to Russia and threatening neighbouring countries including Taiwan.

Image credit: Unsplash

Chip restrictions

China’s ability to manufacture chips also allows it to progress in “critical fields such as artificial intelligence” and engage in strategic competition with the US they said.

“The PRC (People’s Republic of China) is now the largest market for semiconductor manufacturing equipment, and it is stockpiling the semiconductor manufacturing equipment to bolster its national self-sufficiency in a long-term competition with the United States,” Moolenaar and Krishnamoorthi wrote.

“Alarming reports show the PRC now purchases more semiconductor manufacturing equipment than the United States, South Korea, and Taiwan combined.”

Chip industry association SEMI said in September that China spent record sums on chipmaking equipment in the first half of the year, spurred by sanctions by the US and its allies and the threat of future sanctions.

The industry body’s director of market intelligence, Clark Tseng, said that Chinese companies were snapping up equipment for mature manufacturing processes, used to manufacture lower-end commodity chips, in the expectation that these could be hit by sanctions.

The lawmakers’ letters give the companies until 1 December to provide information on their top customers in China by revenue, a list of US export licences with the Commerce Department and data on the volume of semiconductor equpment shipped to China.

New sanctions

The inquiries also ask for information on the companies’ global manufacturing footprint, including production operations in the US and China, and plans for new or expanded offshoring, amongst other data.

The letters come amidst resistance to new US sanctions within the chip equipment industry.

“We understand that some (chip equpment makers) believe we should limit the expansion of… future unilateral US controls, due to perceived impacts on the competitiveness of this sector,” the lawmakers wrote.

“However, enhanced export controls simply are not mutually exclusive with a robust and thriving (chip equipment) industry.”

In August, California Democrats said new export controls “could send longstanding US companies into a death spiral” because US allies have not imposed equivalent China export curbs on their own companies.

Matthew Broersma

Matt Broersma is a long standing tech freelance, who has worked for Ziff-Davis, ZDnet and other leading publications

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