As the U.S. and its allies implement policies restricting semiconductor exports to China, China has swiftly increased its imports of chip manufacturing equipment over the past year, doubling its imports of lithography equipment from the Netherlands. Specifically, within 5 years, China imported more than 400 lithography machines from this country.
According to data from the General Administration of Customs of China, China imported semiconductor manufacturing equipment valued at $27.4 billion in 2023, marking a 46.48% increase compared to the previous year (excluding semiconductor wafers and display production). China’s imports of semiconductor manufacturing equipment have doubled every month since September 2023. In December 2023, just before export restrictions on semiconductor equipment took effect in the Netherlands, China’s imported goods saw a 190.27% increase in value and a 29.28% increase in quantity.
Among these, lithography machines are the most heavily invested equipment by China. Lithography machines play a crucial role as a “key” in the semiconductor chip production process, encompassing systems such as optics, electronics, computing, precision mechanics, control, and other complex components. In 2019 and 2020, China imported 40 and 57 lithography machines from the Netherlands, respectively. This number quickly rose to 93, 78, and 176 units in the following three years. Over the past 5 years, China has imported a total of 444 lithography machines from European trading partners, predominantly from the Netherlands. Apart from lithography machines, China also imports other equipment for semiconductor production, such as CVD equipment, dry plasma etching tools, PVD equipment, and step and repeat aligners equipment, all from the Netherlands.
The import of lithography equipment from the Netherlands is expected to remain even higher if it has not been for the United States requesting ASML to cancel the shipment of some DUV machines to China in December.
Amidst the increasing demand for expanding semiconductor chip production, China has also witnessed a rise in the average selling prices of imported IC manufacturing equipment. Specifically, the average selling price for equipment imported from the Netherlands has increased from around $14 million in 2022 to nearly $30 million in 2023. This reflects a growing demand for advanced DUV machine imports, alongside low-end equipment that can be met by domestic supply.
Apart from the Netherlands, Japan is also a country China targeted for advanced chip manufacturing equipment. In July and December 2023, the number of China’s imports from Japan experienced a significant surge, in the context of Japan’s export restriction on semiconductor chip manufacturing equipment taking effect from July 23. 2023. Over the past year, semiconductor equipment suppliers based in Japan have seen a substantial increase in their sales in China, accounting for 30-50% of their revenue.
According to some reports from the General Administration of Customs of China – January 2024:
China’s importing chip manufacturing equipment | ||||||
| Commodity | 2022 | 2023 | ||||
| Quantity | Value (million USD) | ASP(million USD) | Quantity | Value (million USD) | ASP(million USD) | |
| CVD equipment | 1.667 | 3.718,21 | 2,23 | 1.780 | 4.875,03 | 2,74 |
| Dry plasma engraving | 1.600 | 3.749,16 | 2,34 | 1.476 | 4.396,10 | 2,98 |
| Ion implanters | 2,425 | 1.062,88 | 0,44 | 425 | 1.331,63 | 3.13 |
| Other apparatus for manufacturing semiconductor devices | 5.140 | 2.240,10 | 0,44 | 4.055 | 3.523,68 | 0,87 |
| Other apparatus used for projecting circuits onto semiconductor materials for manufacturing semiconductors or ICs, primarily lithography machines | 904 | 2.547,57 | 2,82 | 794 | 7.098,57 | 8,94 |
| Other etching and stripping equipment for manufacturing semiconductors or IC | 778 | 874,58 | 1.12 | 502 | 785,57 | 1,56 |
| Other film deposition equipment for manufacturing semiconductors or ICs | 179 | 251,55 | 1,41 | 184 | 517,68 | 2,81 |
| Oxidation, diffusion, annealing, and other heat treatment equipment for manufacturing semiconductors or ICs | 1,859 | 1.743,16 | 0,94 | 1.735 | 1.810,09 | 1.04 |
| PVD equipment | 771 | 1.102,40 | 1,43 | 638 | 1.405,95 | 2,20 |
| Step and repeat aligners | 331 | 1.415,53 | 4,28 | 296 | 1.655,88 | 5,59 |
Source: General Administration of Customs of China, January 2024
| Countries supplying microchip manufacturing equipment to China | ||||||
| 2022 | 2023 | |||||
| Supplier | Quantity | Value (million USD) | ASP (million USD) | Quantity | Value (million USD) | ASP (million USD) |
| Japan | 5.320 | 5.892,35 | 1.11 | 4,871 | 7.519,87 | 1,54 |
| US | 2,552 | 2.970,95 | 1.16 | 1.947 | 2.854,35 | 1,47 |
| Netherlands | 186 | 2.564,00 | 13,78 | 244 | 7.241,69 | 29,68 |
Source: General Administration of Customs of China, January 2024
Information source: https://www.digitimes.com/news/a20240124VL203/china-equipment-lithography-netherlands.html