US China chip war.

Since Washington introduced sweeping restrictions on October 7 to limit Chinese companies' ability to obtain or manufacture advanced computer chips, Yangtze Memory Technology, China's largest memory chipmaker, has issued at least 20 tenders for a broad range of chipmaking equipment. «The current strategy is that if there is workable domestic semiconductor production equipment, even though we need help, we will buy from Chinese companies. » «I anticipate most of the orders would end up in the hands of domestic suppliers who would prioritise clients like us, but there are still quite a few pieces beyond their capability». «They may want to step up self-sufficiency in terms of chip manufacturing equipment in reaction to the export controls, but in fact, localisation will be slower as a result of the controls,» said Mark Li, semiconductor analyst at Sanford C. «The biggest bottleneck is that their customers, because of lack of access to foreign equipment, will be unable to expand more».

Three people with direct knowledge of the situation said that the company's expansion plans were suspended while YMTC had not cancelled or postponed already placed equipment orders. That would rob Advanced Micro-Fabrication Equipment, one of China's largest chip equipment makers, of a quarter of Jefferies's analysts' forecast revenue for 2025.

Despite stockpiling efforts, several equipment companies could also be hit by the inability to procure foreign components for their products. «Only the assembly part of our products is completely based in China, while the rest requires foreign technology and components. So just limitations on components can easily choke us,» said an Amec engineer. In addition, the equipment makers are facing a talent drain as engineers seek higher-paying jobs in chip design houses and semiconductor manufacturers.

«Chinese equipment companies should also worry about the stability of their existing R&D (research and development) team, as we have received quite a lot of inquiries from equipment engineers regarding switching to other sectors that have not been affected as much by the new sanctions,» said a Shanghai headhunter. In the face of mounting challenges, the response from some equipment companies is to explore greater collaboration with rivals. «The new sanctions are forcing companies like us to seek further cooperation with each other,» said an Amec manager. «Executives from several companies, including ACMR, Amec and others, are breaking walls and have had meetings on this».

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