China began stockpiling chipmaking equipment to prepare for wider US sanctions, with data from the General Administration of Customs showing the value of imports rose 44 per cent year-on-year to $25.9 billion in the first seven months of 2024, Bloomberg reported.

Figures from the department put imports for the same period in 2023 at $18 billion and $21.6 billion in 2022, the news outlet wrote.

The buying spree is in stark contrast to the global market, with US-based provider of chip equipment market data SEMI stating semiconductor capex “remained conservative” in the first half, resulting in a 9.8 per cent decrease.

Wider US restrictions introduced in 2023 to curb exports of advanced chipmaking machinery to China was followed up in March by requests for allies to introduce new controls to prevent access to semiconductor technology, as part of an effort to close export loopholes.

Chinese companies have stepped up investment in chip manufacturing over the past year, driving growth for overseas equipment makers, which experienced weak overall demand in recent quarters. 

ASML, an advanced chip equipment supplier, saw China sales rise to 49 per cent of its total in Q2 from 24 per cent a year earlier, while Lam Research highlighted “slightly stronger domestic China spending” in the period, accounting for 39 per cent of total sales compared with 26 per cent in the same period in 2023.

Tokyo Electron’s sales to the country in its fiscal Q1 (ending 30 June) increased 80 per cent to JPY277 billion ($1.9 billion), making up 50 per cent of the total, up from 39.3 per cent.

China’s largest contract chipmaker Semiconductor Manufacturing International Corp raised capex 30 per cent year-on-year to $2.3 billion in Q2.