Chinese exhibitors went full native.
SEMICON China expo in Shanghai showcased local exhibitors in the semiconductor ecosystem between March 20-24. Exhibitors reportedly championed Beijing's push for deeper autonomy in advanced chip-making processes to reduce reliance on US equipment.
Beijing's push to go native comes as hissing US-China tensions continue to bubble over into tech. China's new direction will cause US semiconductor equipment suppliers to hasten the diversification of supply chains to mitigate the impact of reduced revenue in China.
Reuters reported that SEMICON China saw Chinese semiconductor companies answer Beijing's call to vigorously promote the procurement of domestic chips. The directive is aimed at providing support for an industry facing increasing geopolitical pressure.
Exhibitors at the event were reportedly advocating for the purchase of local chips in their booths and marketing materials. The three-day exhibition offered insight into the current sentiment in China's semiconductor industry.
KLA Corp was the only major US semiconductor equipment manufacturer to participate physically at this year's expo. Lam Research and Applied Materials have sponsored SEMICON China for two consecutive years, they did not have physical exhibits this year.
Micron also sponsored SEMICON China this year but did not physically exhibit its latest products. Chinese industry insiders said that many US equipment vendors are trying to keep a low profile to avoid upsetting Washington.
Dutch semiconductor heavyweight ASML was also absent. The company is facing increasing pressure from the US government not to supply to Chinese customers.
SEMICON China's website said that Cymer, the US company that provides light sources for ASML did not participate in the 2024 SEMICON China expo. Both ASML and Cymer were exhibitors at the 2023 event.
South China Morning Post reported that the exhibitors at this year's SEMICON China mainly comprised Chinese local companies, with a focus on semiconductor manufacturing equipment and materials. The booths of the largest chip equipment manufacturer in China, Naura Technology Group, and CMOS image sensor producer, SMIC, were crowded with attendees.
Chinese wafer manufacturers have reportedly established closer connections with Naura to ensure the supply of critical equipment components. The aim is to maintain production capacity uninterrupted in the event of US government sanctions.
Industry insiders speculate that Naura is cooperating with SMIC. Naura is reportedly dispatching a large number of engineers to wafer factories to assist operations.
Chinese-made chip manufacturing equipment accounts for about 20% of the market share. A senior executive of a Chinese equipment manufacturer was quoted saying the goal is to achieve a 70% share by 2035.
For example, KLA Corp has warned that its Chinese business will be affected by US export controls. It is making plans for supply chain diversification.
Karthik Rammohan, Vice President of KLA Corp's Global Operations Group, recently visited Hanoi, Vietnam, to assess opportunities for diversifying the supply chain and supporting manufacturing operations in Asia. China's contribution to KLA Corp's total revenue was 26% in 2023, down from 31% in 2022.
