As mentioned earlier, the US government is working to further expand its sanctions n the exportation of chipmaking equipment to China.

In so doing, Washington is now seeking cooperation with the Netherlands and Japan which is now leading to Chinese chipmakers scrambling to stockpile as much manufacturing equipment as they can purchase before the restriction starts.

Even though stockpiling might be a temporal option, Chinese chipmakers are now turning their attention toward local suppliers such as the ones listed below.

SHANGHAI MICRO ELECTRONICS EQUIPMENT (SMEE)

SMEE is known as the only Chinee producer of lithography machines that are used in the manufacturing of semiconductors.

If the cooperation falls through between the US, the Netherlands, and Japan, then SMEE would be the viable option for Chinese chipmakers which could in fact place it as a direct competitor against the world’s popular ASML.

According to the company’s official statement, it has developed machines that are capable of producing chips at the 90-nanometer node standard.

The chips made with this technology are meant for low-end and simpler tasks. SMEE sells the majority of its lithography machines to chip packaging plants.

The company was founded back in 2002 by a former Shanghai Electric Group Co. Ltd Vice president, He Rongming.

Its largest shareholder, owning 32%, is the Assets Supervision and Administration Commission of the State Council (SASAC), which oversees state-owned enterprises.

NAURA TECHNOLOGY GROUP CO LTD

Another brand to be talked about rescuing chipmakers in the country is Naura Technology Group Co. Ltd which was founded back in 2001. The company makes etching equipment and it’s in competition with America’s Applied Materials Inc. as well as Lam Research Corp and even the Japanese’s Tokyo Electron Ltd.

One of Naura’s most advanced etching machines supports 55nm and 2nm chipmaking technology which one can argue is still quite behind in the industry.

They also make deposition machines that utilize chemicals and gases to silicon water throughout a chipmaking process.

Naura also makes machines that can service the 4nm to 28nm process nodes of its deposition machines.

One of its largest shareholders is Beijing Sevenstar Electronics and as well as other state-led investment funds.

ADVANCED MICRO-FABRICATION EQUIPMENT INC CHINA (AMEC)

AMEC also makes etching equipment that is used to remove excess material from the surface of silicon wafers.

The company was founded about 20 years ago in 2003 by Gerald Yin who is a naturalized US citizen. 15% of the company’s share is now owned by China’s “Big Fund” for chips and another 15% is owned by a tech venture capital firm that is affiliated with the Shanghai government.

Some of its machines have entered production lines for chips as advanced as those using 5 nm technology, its January-June 2022 earnings report showed, making it technologically closer than Chinese peers to competing with Lam Research and Applied Materials.

Unlike others in the same market, AMEC’s market share is dwarfed by overseas rivals. The company only made about CNY3.1 billion (US$444.9 million) in 2021 revenue which is about 2.5% of what Applied Materials made that same year.

BEIJING E-TOWN SEMICONDUCTOR TECHNOLOGY CO LTD (BEST)

The company is known for the production of degumming equipment used to remove photoresist chemicals during lithography processes.

This segment accounted for over 47% of its 2020 revenue, an investment prospectus showed.

The company also makes etching machines even though this accounts for only a single-digit percentage of its revenue.

The company is fairly young as it was founded back in 2015 with its biggest shareholder being Beijing E-Town Capital, a venture capital fund under the Beijing municipal government which invested in a number of chip firms.

ACM RESEARCH INC 

This company designs equipment that is used for the cleaning of wafers. And its direct competitor in the market is Tokyo Electro, Lam Research, Korea’s Mujin Electronics Co., and another Japanese brand called Screen Holdings Co. Ltd.

ACM makes the majority of its revenue via its small number of customers in mainland China such as Huahong, SMIC, and YMTC even though it has also sold equipment to South Korea’s SK Hynix inc. in the past.

The company was founded as far back as 1998 by a US citizen, David Wang, and the company went public on the NASDAQ in 2017.

It has a Shanghai-based subsidiary that owns 80% of its shares while China’s Big Fund as well as other government-led initiatives on other parts of the company.

While ACM’s headquarters are in the United States, almost 90% of its staff are based in mainland China and Taiwan, and most of its research and development and sales take place in those locations, the company said in its 2021 annual report.

One obvious thing is that even if Chinese chipmakers are going to become less dependent on foreign equipment manufacturers, the local ones are still quite far back in the chipmaking industry as a whole.

This will definitely have a big impact on the country’s chipmaking capabilities which according to analysts could throw the country’s advanced electronics manufacturing off balance.

The US government in cooperation with the Netherlands and Japan is yet to formalize their agreement to stop the exportation of high-end chipmaking machinery to China but when they do, it could affect every facet f the country’s advanced technology and smart business categories such as IoT, autonomous cars and EVs, advanced computers and smart devices, and so forth.