The Semiconductor Industry Association (SIA), a trade association and lobbying group representing U.S. chipmakers, requested that semiconductor equipment companies in allied countries such as South Korea and Japan curb exports to China.
Korean semiconductor equipment companies, largely unaffected by U.S. export curbs until now, could soon be banned from exporting some of their products to China. Global semiconductor equipment manufacturers such as ASML, Lam Research and KLA already face similar restrictions.
The SIA called for new export controls in a letter sent to the U.S. Bureau of Industry and Security last month. The association claimed that the current unilateral chip equipment export controls put U.S. firms at a competitive disadvantage and stressed the need for multilateral controls.
The U.S. effectively banned U.S. companies from exporting semiconductor equipment to Chinese chipmakers that produce DRAM memory chips 18 nanometers or below, NAND flash chips at or above 128 layers, or logic chips at or under 14 nanometers. The Netherlands enforced similar export controls, restricting ASML from selling extreme ultraviolet (EUV) lithography equipment to Chinese chipmakers.
In response to escalating export bans, Chinese companies began stockpiling necessary equipment from global semiconductors equipment suppliers in advance, which led to a surge in sales for companies such as ASML, Lam Research, and KLA while raising the share of Chinese companies in their total sales.
China accounted for 8% of ASML’s sales in the first quarter of last year, but by the third quarter, this figure jumped to 46%. Driven by demand from China, ASML’s annual revenue soared to 27.56 billion euros, up 30% from the previous year. China’s share in Lam Research’s revenue in the first quarter of the 2024 fiscal year (July-September) rose to 48%, an 18 percentage point increase from a year ago.
Analysts say U.S. export curbs on semiconductor equipment could adversely impact the growth of domestic companies. “Semiconductor equipment companies reported better than expected earnings last year because Chinese companies amassed equipment in response to export restrictions,” said Lee Seung-woo, an analyst at Eugene Investment & Securities. “U.S. export controls on advanced equipment could negatively affect sales of equipment companies this year.”
