China’s top chip equipment makers have experienced a significant surge in revenue in the first half of this year, according to research released by Shanghai-based CINNO Research. This growth comes as part of Beijing’s ongoing efforts to strengthen the country’s semiconductor industry and achieve self-reliance. The top 10 domestic equipment manufacturers recorded revenue of approximately 16.2 billion Chinese yuan ($2.2 billion), representing a 39% year-on-year increase.
The Complex Nature of Semiconductor Manufacturing
Semiconductors, crucial components found in various devices ranging from smartphones to satellites, have become entangled in the broader technological battle between the United States and China. Washington has imposed export restrictions on key semiconductor equipment and technologies to limit Beijing’s access. The semiconductor supply chain is composed of numerous companies involved in designing, manufacturing, and providing relevant machinery. Historically, China has heavily relied on foreign firms for these tools, lagging behind the United States, South Korea, and Taiwan. However, recent U.S. sanctions on Chinese tech companies have compelled Beijing to prioritize domestic industry growth and seek self-reliance.
According to CINNO, Naura Technology Group Co. is the top Chinese semiconductor equipment manufacturer in terms of revenue. The company specializes in producing tools essential for the chip manufacturing process. In the first half of the year, Naura’s operating revenue surpassed 7 billion yuan, marking a remarkable 68% year-on-year growth. This significant increase outpaced other domestic players in the industry.
Advanced Micro-Fabrication Equipment Inc. China (AMEC): A Key Player in China’s Industry
AMEC, a Chinese domestic player, ranks as the second-largest manufacturer of semiconductor equipment in the country. The company is known for producing machinery required for the semiconductor manufacturing process. CINNO reported that AMEC achieved a 28% year-on-year revenue growth, reaching 2.53 billion yuan in the first half of the year.
ACM Research, the third-largest semiconductor equipment manufacturer in China, focuses on producing cleaning and packaging equipment for semiconductors. In the first half of the year, the company experienced a notable 47% year-on-year revenue surge, amounting to 1.61 billion yuan.
Challenges Faced by China’s Semiconductor Industry
Despite the positive momentum, China still faces limitations in accessing advanced chipmaking tools. For instance, ASML, a Dutch firm, manufactures an expensive chipmaking tool known as an extreme ultraviolet lithography machine, which is crucial in producing cutting-edge chips. However, the Dutch government has limited the export of these machines to China, hindering the country’s progress. These restrictions, coupled with concerns over escalating tensions with the United States, have led Beijing to focus on domestic alternatives.
Progress in China’s Semiconductor Industry
Notwithstanding the obstacles, China’s semiconductor industry has made strides in developing more advanced chips, even in the face of U.S. sanctions. Huawei recently launched a new smartphone capable of connecting to next-generation 5G networks, defying American efforts to hinder the Chinese tech giant’s access to this technology. This achievement can be attributed to a chip that appears to be manufactured by SMIC, China’s largest chipmaker. The chip surprised many industry experts as it represents a more advanced piece of technology than previously anticipated.
China’s domestic chip equipment makers have seen a notable surge in revenue as the country strives for self-reliance in the semiconductor industry. Despite facing challenges in accessing advanced chipmaking tools, Chinese companies are successfully driving progress and innovation. As China continues to invest in its domestic semiconductor industry, it aims to reduce reliance on foreign technology and establish itself as a global leader in chip manufacturing.
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