Chinese chip companies are confident in withstanding new US export controls despite restrictions

From Investing.com: 2024-12-03 02:41:06

Chinese chip companies targeted by fresh U.S. export controls vow to speed up local supply chains to continue production. The latest restrictions focus on equipment, software, and memory, affecting 140 companies including Naura Technology Group and ACM Research. Some firms, like Empyrean and Jiangsu Nata Opto-Electronic Material, are prepared with stockpiles and domestic substitutions. Others, such as Beijing Huafeng Test & Control Technology, have fully localized their supply chain. Chinese authorities denounce the move as “economic coercion,” but chip-making stocks rose slightly as analysts say the impact may be manageable.

The U.S. export controls target a weak spot in China’s semiconductor industry heavily reliant on foreign equipment. Capital expenditure in the Chinese chip industry is expected to drop by 30% next year to $35 billion due to the curbs. Analysts say Chinese firms have increased purchases of foreign equipment, with imports of semiconductor equipment rising by a third to $24.12 billion in the first nine months of this year. The exclusion of ChangXin Memory Technologies (CXMT) from the entity list surprised some, as the Biden administration aims to limit China’s access to AI chips for military use.

Shares of South Korean equipment suppliers to CXMT rose after its exclusion. Jusung Engineering, a CXMT supplier, saw shares rise by 7.7% in morning trading. Mirae Corp, which derived about 15% of its revenue from CXMT in the first half of this year, signed supply deals worth $6.41 million this year. Its shares rose 1.4% in morning trade. The move brought short-term relief to South Korea’s chip sector, with concerns about pending restrictions easing.



Read more at Investing.com: Chinese chip firms say they can withstand new US export curbs By Reuters