China's imports of IC making gear from Netherlands rebounds ahead of rumored fresh restrictions

As the world's major semiconductor manufacturing exporters are joining hands to impose export controls against China, China's IC manufacturing equipment imports from the Netherlands rebounded in May.

According to China Customs data, China's imports of IC manufacturing equipment (excluding those for wafer and display manufacturing) declined by 13.43% from US$1.57 billion to 1.36 billion in May, the eight-month drop in a row.

After the import growth from Japan for three consecutive months, IC-making equipment exports from Japan, the major import source of China, dropped by 9.34% as Japan is ready to impose an export ban against China on 23 semiconductor equipment items for technology nodes below 14nm in July.

Meanwhile, despite rumors that the Dutch government might unveil new semiconductor export control measures at the end of June or in early July against China, China's imports of IC-making equipment from the Netherlands rebounded with an annual growth of 66.44%. It was the first growth in seven months after the US government issued controls on the export of advanced US AI and semiconductor technology to China, which caused the Netherlands to overtake Japan as the largest IC-making gear exporter to China.

Overall, the Netherlands, Japan, Singapore, the US, and Taiwan constituted nearly 90% of China's IC-making equipment imports in the first five months of 2023. Malaysia, the sixth-largest IC manufacturing equipment exporter to China, saw its share of China's imports drop from 5.68% in 2022 to 1.68% in the first five months of 2023. It is noteworthy that Malaysia is one of the major semiconductor manufacturing exporters that has seen a huge growth in exports in recent years. According to the International Trade Centre, Malaysia's exports of IC manufacturing equipment have grown by more than 100% every year since 2020.

Bloomberg quoted unnamed sources saying that the Dutch government is preparing to release updated export controls that will impose further restrictions on the shipment of ASML chipmaking machines to China, with the publication expected as early as this week. It remains to be seen when the new restrictions will be announced and how long it will take effect after the announcement.

Source: China Customs, June 2023