China’s semiconductor sector is bracing for another challenging period under Donald Trump by accelerating its purchase of foreign chipmaking equipment and exploring alliances with international partners. Anticipating stricter U.S. trade restrictions, industry leaders are also focusing on self-sufficiency and overseas talent acquisition, responding to Trump’s historically aggressive stance on China’s tech landscape.
Chinese chip industry sources indicate that Trump’s return could prompt intensified trade constraints similar to those in his first term, where major firms like Huawei, ZTE, and SMIC faced sanctions. These restrictions forced China to seek alternative suppliers and boost domestic manufacturing capabilities, marking a shift toward self-reliance. Zhu Jing, deputy secretary-general of the Beijing Semiconductor Industry Association, advised chip firms to actively seek international partnerships and adapt to possible procurement opportunities should sanctions against China lessen. Zhu also urged an increased focus on overseas talent, suggesting that restrictive U.S. policies could present China with a unique advantage in attracting skilled professionals.
Several reports indicate the industry expects an uptick in export controls and potential tariffs under a second Trump administration, further underscoring the importance of self-sufficiency. Jinan Lujing Semiconductor Co, a key industry player, acknowledged that Trump’s first term underscored the critical need for localized semiconductor production in China.
To bolster its semiconductor capabilities, China has significantly raised its import of chipmaking equipment. Between January and September, China’s semiconductor equipment imports surged by a third to $24.12 billion, with $7.9 billion directed towards lithography machines essential for advanced chip production. Notably, a substantial portion of these machines, valued at $7 billion, came from the Netherlands, though U.S. restrictions have blocked the export of ASML’s advanced EUV and some older DUV models. Reuters sources report that Chinese firms have been actively stockpiling semiconductor equipment in anticipation of potential impacts from the U.S. election.
According to Nori Chiou, investment director at White Oak Capital Partners, Chinese tech companies are now more prepared than during the 2018 trade war, having bolstered production capacities to counteract trade risks. This strategic preparation reflects the industry’s commitment to mitigating potential disruptions as it navigates an increasingly complex geopolitical landscape.
Featured image courtesy of ChinaFile
Follow us for more updates on China’s chip equipment.