US chip-gear makers told to wait for relief from China curbs
- The US is working on an agreement that would make companies in the Netherlands and Japan subject to limits on sales of such equipment to China
- Commerce secretary Gina Raimondo made the comments when she met representatives from equipment makers including Lam and KLA
US Secretary of Commerce Gina Raimondo this week had a sobering message for American makers of chip-manufacturing equipment: you will need to wait as long as nine months before Washington can reach an accord with US allies over strict new rules aimed at restricting China’s access to certain technologies.
The US is working on an agreement that would make companies in the Netherlands and Japan – home to some of the biggest suppliers of chip-making gear – subject to limits on sales of such equipment to China. US companies are already bound by the export controls, which they say will cost them billions of dollars in revenue even as their main competitors in Europe and Japan face fewer limits on China sales.
Reaching the accord, aimed at levelling the playing field, could take six to nine months, Raimondo told representatives of the US companies, according to people with direct knowledge of the meeting.
Washington announced a new round of export control rules on October 7 to limit China’s access to advanced chips and semiconductor-manufacturing equipment made with US technologies. Raimondo made the comments when she met representatives from equipment makers that include Lam Research Corp and KLA Corp on Wednesday, said the people, who requested anonymity discussing a non-public interchange.
A spokeswoman for the US Department of Commerce declined to comment. Representatives of Lam Research and KLA did not immediately respond to requests for comments.
The global chip-production equipment market is dominated by US companies Lam Research, KLA, Applied Materials, as well as ASML Holding in the Netherlands and Japan’s Tokyo Electron. Currently, the non-US suppliers have more latitude in doing business with China. For the US triumvirate, restrictions on what their overseas competitors can ship to China cannot come fast enough.
Applied Materials, Lam Research and KLA have warned investors that the new export control measures will cut into their revenue. The risk for them is that – until the restrictions apply in a more even-handed way – foreign peers will win market share in China, generating added revenue that in turn can be ploughed into developing new products.