China bought $40 billion worth of chips: New strategy

Imports of machinery used to make computer chips will grow 14% in 2023 to nearly $40 billion, according to data from Bloomberg

by Sededin Dedovic
China bought $40 billion worth of chips: New strategy
© Annabelle Chih / Getty Images

In an attempt to strengthen its semiconductor industry and further strengthen its technological progress, China imported a significant number of chip manufacturing machines in 2023. According to Bloomberg calculations based on official customs data, imports of machinery used to manufacture computer chips rose 14% to nearly $40 billion.

The figure marks the second highest amount by value recorded since 2015, underscoring the strategic importance the Chinese government and the national chip industry attach to further developing the technology. Despite an overall decline in imports of 5.5% in 2022, a significant increase in chip machine imports was recorded in 2023.

Chinese chip companies are actively investing in new semiconductor manufacturing facilities, with the goal of improving national capabilities and countering export controls imposed by the United States and its allies. These restrictions have posed significant challenges for Chinese companies in accessing machinery critical to the production of state-of-the-art chips, hindering the growth of China's high-tech sector, which is seen as a major competitor to the US.

The Netherlands is a very important importer

Particularly noteworthy is the increase in Chinese imports from the Netherlands in anticipation of the upcoming export controls. The surge in imports comes ahead of new restrictions that will further limit the ability of companies, including Semiconductor Manufacturing International Corp., to acquire the latest chip-making machinery.

In December, imports of lithography equipment from the Netherlands surged nearly 1,000% year-on-year, reaching $1.1 billion, as companies scrambled to secure machinery before new restrictions took effect this month. The urgency could be felt, as Chinese companies made significant efforts to acquire the latest technology in the shortest possible time.

The increase in imports was a national response to the upcoming restrictions, and this is a proactive and proactive measure against the challenges posed by export control. This is evident in the reported layoffs of the Dutch company ASML Holding NV, which reportedly halted shipments of some high-end machinery to China at the request of the US government.

These cancellations occurred weeks before the imposition of a ban on the export of high-end chip-making equipment, which the Chinese saw as a strategic way to weaken the development of Chinese technology.