ASML and Pan Lin breathed a sigh of relief: Export restrictions do not affect sales to China

Source: Tiantian IC

    According to Reuters, two chip manufacturing equipment companies, ASML and Fanlin Group, have stated that despite export restrictions imposed by the United States on equipment used to manufacture cutting-edge semiconductors, they expect strong sales to China later this year.

    This comment indicates that given China‘s strong demand for mature technology chips such as electric vehicles (EVs), China may become a major customer of the industry this year.

    Both sides also stated that although the United States imposed comprehensive restrictions on China‘s semiconductor industry in October, they expect sales to increase for Chinese companies in the coming months.

    So far, the export restrictions on ASML and Fanlin Group have only affected equipment used to manufacture state-of-the-art chips.

    Fanlin Group and ASML stated that in the process of promoting more self-sufficient production in China, Chinese customers are purchasing tools to manufacture more mature technology chips for products such as electric vehicles, mobile phones, and personal computers.

    Fanlin Group initially estimated that the restrictions on China would result in a loss of revenue of $2 billion to $2.5 billion in 2023, but the company stated that it had received "clarification" from the US government regarding the regulations, with Chief Financial Officer Doug Bettinger stating in a conference call that it would be allowed to sell devices worth "hundreds of millions of dollars", which were initially considered prohibited.

    ASML stated that it has a backlog of approximately 39 billion euros in orders, equivalent to approximately two years of tool shipments. CEO Peter Wennink told investors on a conference call that Chinese customers committed to manufacturing mature process chips account for approximately 30% of these orders. This is a significant improvement from November last year, when ASML stated that China accounted for 18% of its € 38 billion backlog of orders at that time.