This photo taken on May 1, 2024 shows professors and students visiting the University of Tokyo’s Minimal Fab, a small semiconductor factory that does not require a clean room. (Photo by Yuichi Yamazaki/AFP) (Photo by Yuichi Yamazaki/AFP via Getty Images)
Yuichi Yamazaki | AFP | Getty Images
Japanese semiconductor equipment suppliers have been counting on China as their biggest source of revenue even as they are caught in the crossfire between China and the United States.
Japan’s semiconductor equipment powerhouse Tokyo Electronics With a market value of nearly US$72 billion, its revenue share in China jumped to 44% in the fiscal year ending March 2024, compared with 23% in the same period last year. According to the company’s financial report. It grew to nearly 50% in the first quarter of fiscal 2025, compared with 39.3% in the same period last year.
Screen HoldingsMeanwhile, in the fiscal year ending March 2024, 43% of its total sales came from China, up from 19% in fiscal 2023.
The proportion increased from 23% in the same period last year to 51% in the first quarter of this fiscal year. The company expects Sales in China will account for 41% For the entire financial year ending in March 2025.
Japanese chip companies’ vast operations in China underscore the challenges the U.S. ally faces in balancing White House demands with its domestic economic interests.
Manufacturing equipment supplied by Japanese companies to China is expected to be used for traditional chips, used in cars rather than smartphones or for training advanced artificial intelligence models.
Bloomberg reports Earlier this week, China threatened to retaliate if Japan further expanded controls on equipment exports to China.
Beijing refuted the report and said it was “committed to maintaining the security and stability of global industrial and supply chains.” Chinese Foreign Ministry Spokesperson Mao Ning China said at a regular press conference on Monday that its export control measures were “fair, reasonable and non-discriminatory.”
When Japan first implemented export controls last June to restrict sales of chip equipment to China, Ministry of Commerce of China The Commerce Department called it an “abuse of export controls” and a “serious violation of the WTO’s statutory responsibilities,” according to a Chinese version of the Commerce Department statement translated by CNBC.
China has been facing increasing pressure from the United States and its allies, who are trying to cut off its access to the most advanced chips.
China has been unable to obtain wafer-making equipment from Dutch company ASML, the only supplier of tools capable of making some of the more advanced wafers. The country’s government has blocked exports of the device to China.
But analysts expect China will soon be able to produce most of the chips needed for most applications.
Industry body SEMI said in a report that since the second quarter of 2023, China has increased its procurement of wafer manufacturing equipment. Thursday report China purchased about $25 billion worth of chip equipment in the first half of 2024, more than the United States, South Korea, Taiwan and Japan combined.
—CNBC’s Evelyn Cheng and Arjun Kharpal contributed to this report.
About The Author
