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China: Imports of microchip equipment up 70%, move to avoid restrictions

China: Imports of microchip equipment up 70%, move to avoid restrictions

China imported record amounts of microchip-making equipment in June and July, ahead of export restrictions from the Netherlands and Japan, two US-allied countries that have been working together to slow down technological progress in the Asian country.

According to Chinese customs data, during the two reference months, purchases in this sector rose to nearly $5 billion, up 70% year on year. A cross-section of the machinery’s provenance indicates that most of the goods come from the Netherlands and Japan: the pressure – as the Financial Times reported – means that buyers must seek licenses from the Amsterdam and Tokyo governments.

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Restrictions for Japan and the Netherlands

The Rising Sun newspaper began implementing the restrictions on July 23, while they will come into force in the Netherlands on September 1. While it is not clear how much the increased imports will affect the gadgets covered by the restrictions, the purchases indicate that China wants to avoid any disruption to its plans to expand chip production. Chinese groups such as Semiconductor Manufacturing International and Yangtze Memory Technologies rely on equipment from the United States, the Netherlands and Japan to make chips.

The category of tools in customs declarations includes lithographic and engraving machines for making chips, not components and materials such as chips. Some of the machinery imported in recent months has been for small foundries that have recently started and been supported by local governments in China, while Beijing is expanding production capacity. The volume of equipment purchases from other countries, including Singapore and Taiwan, is also large.