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China circumvents US chip sanctions by buying used, banned equipment

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As the U.S. government plans to implement stricter constraints on the Chinese semiconductor sector, China-based chipmakers are ramping up their purchases of wafer fab equipment (WFE) to ensure that production of fabs continues. However, Chinese companies are being discreet with their purchases as some of those violate U.S. sanctions, reports DigiTimes.

Companies such as SMIC, HuaHong, Nexchip, and Silan Microelectronics are on a spending spree, purchasing both new and second-hand tools, according to the story that provides a source with knowledge of the situation. Some of the WFE they have purchased can’t be shipped to China as this would violate the U.S.-imposed sanctions, which is the reason that many purchases are done discreetly.

Huawei, who currently has several sanctions by the U.S. government and legally cannot procure anything containing advanced U.S. technology without permission, is buying up more wafer fab tools. 

Chinese companies are not permitted to buy tools for making 14nm-class chips and those using more advanced fabrication technologies. Only SMIC can produce chips on such sophisticated nodes.  

The US is working with Japan and the Netherlands on further restrictions for Chinese semiconductor makers.  At this stage, it has not been made clear what these restrictions will be and when they will be imposed.

ARTICLE: PAUL MURDOCH

MANAGING EDITOR: LUKE MOCHERMAN

PHOTO CREDIT: BLOOMBERG

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Paul Murdoch

Paul, 37, is from Scotland in the UK, but currently lives and works in Bangkok. Paul has worked in different industries such as telemarketing, retail, hospitality, farming, insurance, and teaching, where he works now. He teaches at an all-girls High School in Bangkok. “It’s a lot of work, but I love my job.” Paul has an active interest in politics. His reason for writing for FBA is to offer people the facts and allow them to make up their own minds. Whilst he believes opinion columns have their place, it is also important that people can have accurate news with no bias.

Paul, 37, is from Scotland in the UK, but currently lives and works in Bangkok. Paul has worked in different industries such as telemarketing, retail, hospitality, farming, insurance, and teaching, where he works now. He teaches at an all-girls High School in Bangkok. “It’s a lot of work, but I love my job.” Paul has an active interest in politics. His reason for writing for FBA is to offer people the facts and allow them to make up their own minds. Whilst he believes opinion columns have their place, it is also important that people can have accurate news with no bias.

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