The income of China's main chip manufacturers saw a tremendous increase in the first six months of the year, as revealed by a study unveiled on Thursday.Semiconductors, which are essential parts used in gadgets from cell phones to satellites, have been affected by the ongoing technology warfare between the United States and China.In an effort to increase its autonomous production and get away from foreign semiconductor companies, China is seeking to develop its internal semiconductor sector.
Research published on Thursday demonstrated that the revenue of China's biggest chip equipment providers skyrocketed in the initial six months of the year, as the nation carries on with its plan to become independent in its semiconductor industry.In the first half of the year, the top 10 domestic equipment producers earned a sum of 16.2 billion Chinese yuan ($2.2 billion), up 39% year-on-year, reported by CINNO Research based in Shanghai.Semiconductors, which are important components in many products like smartphones and satellites, have been entrapped in the wider technology conflict between the U.S. and China.The U.S. has attempted to use export controls to restrict Beijing from obtaining key semiconductor equipment and technology.
A complex network of companies, selling chip design tools and those involved in chip manufacturing and its relevant equipment, is what the chip supply chain is comprised of. In the past, China's semiconductor industry heavily drew on the external equipment in order for it to do well, hence, it was lagging behind leading nations such as the U.S., South Korea and Taiwan. In 2019, U.S. sanctions on the technology companies such as Huawei and SMIC, the largest Chinese chipmaker, have made Beijing strive for self-reliance and independence from foreign technology; this has, in turn, driven China's domestic chip equipment manufacturing firms' revenues. According to CINNO, Naura Technology Group Co. is the highest revenue generating Chinese semiconductor equipment manufacturer, producing the tools necessary in chip manufacturing. This year's first half saw their operating revenue reaching more than 7 billion yuan, which is a 68% year-on-year surge, outdoing other companies' results. AMEC, the second-largest Chinese domestic player, garners revenue from machines required for semiconductor manufacturing. As per CINNO, their revenue increased by 28% year-on-year to 2.53 billion yuan in the first six months of the year.
ACM Research is the third-biggest Chinese firm that manufactures cleaning and packaging equipment for semiconductors as its major revenue source, with a year-on-year surge of 47% in the first half of the year to 1.61 billion yuan. However, the country lacks access to some of the most sophisticated chipmaking tools, for instance, the extreme ultraviolet lithography machine from Dutch firm ASML, which is necessary to craft the most advanced chips; although, ASML has been restricted by the Dutch government from exporting these machines to China. Owing to these impediments and to concerns over intensifying US tensions, Beijing has been concentrated on its domestic firms. Yet, in spite of US sanctions, China’s semiconductor industry seems to be moving towards more sophisticated chips. Huawei recently introduced a new smartphone, capable of connecting with next-generation 5G mobile networks, despite US sanctions meant to sever their access to this technology. This was made possible by a chip allegedly made by SMIC – a more advanced level of technology than many had expected the company to manufacture.
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