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Despite restrictions China acquires US chip manufacturing equipment

Despite restrictions China acquires US chip manufacturing equipment China buys US chip equipment despite restrictions (Photo: GettyImages)

Chinese companies are buying up American chip manufacturing equipment despite several restrictions imposed by the United States on the export of such goods, according to Reuters.

An annual report released by the US House of Representatives' bipartisan China Committee says that importers can often buy equipment if they claim it is used on an older production line, and with limited end-use inspection capabilities, it is difficult to verify that it is not being used to create more advanced chips.

It is noted that the United States has managed to close a key loophole in its efforts to cut off China's access to advanced chip-making tools by persuading Japan and the Netherlands, which have similarly robust chip-making equipment industries, to announce their restrictions on technology exports.

But China has been stockpiling equipment, taking advantage of the gap between the introduction of export restrictions, as the United States announced it in October 2022, and Japan and the Netherlands in July and September 2023, respectively.

According to the document, from January to August 2023, China imported $3.2 billion worth of semiconductor manufacturing equipment from the Netherlands, which is 96.1% more than in the same period in 2022. In the first eight months of 2023, China's imports of semiconductor equipment from all countries totaled $13.8 billion.

Restrictions on trade with China

Initiatives to put economic pressure on China, including the introduction of certain trade restrictions, have become increasingly common in the United States and the European Union.

Bloomberg stated that the EU and the US are discussing the possibility of close cooperation to eliminate the risks associated with investing in sensitive technologies in countries such as China.

China has begun to control the export of certain metals that are widely used in the semiconductor industry for the production of microchips.