China is turning to Japan for semiconductor equipment, ignoring US restrictions

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Once worthless second-hand computers have been sold for almost $1 million

US sanctions against Chinese semiconductor producers have affected businesses in the pockets of both countries, but Japanese firms have benefited from the crisis. A recent study says used equipment dealers in Japan have seen their costs increase by 20 per cent since last year as Chinese companies snap computers that are not subject to US restrictions.

Nikkei Asia writes that in the aftermath of US sanctions, Chinese semiconductor factories are turning to Japan for used machinery, driving up costs to the country’s second-hand market. With global chip shortages still causing production issues across several markets, even older, out-of-date devices are selling fast; the price of core equipment, such as lithography systems, has tripled.

“Nearly 90% of used machines appear to be headed to China,” said a source at Mitsubishi UFJ Lease & Finance. A used equipment dealer added, “Machines that were basically worthless several years ago are now selling for 100 million yen [$940,000].”

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Wafer capacity leaders

Company Monthly wafer manufacturing capacity Total global capacity share
Samsung 3.1 million 14.7%
TSMC 2.7 million 13.1%
Micron Technology 1.9 million+ 9.3%
SK Hynix ~1.85 million 9%
Kioxia 1.6 million 7.7%
Intel 884,000 ~4.1%

In September, the US government put sanctions on China’s largest chipmaker, Semiconductor Manufacturing International Company (SMIC). It has now been added to the same registry of organisations as Huawei, meaning that US businesses must acquire a licence before exporting those goods to SMIC.

Although most of the machinery used is being transported straight from Japan to the buyers’ factory floors, several older generation computers are being hoarded—not that the sellers care about it. The final objective is for the Chinese semiconductor industry to reduce its dependency on US imports, thus ensuring that sanctions have less effect.

 

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