Even though the US government has continued to ratchet up export restrictions on advanced semiconductor manufacturing equipment to China, organizations in the country have increased purchases of the technology. Credit: Shutterstock China is stockpiling chipmaking equipment despite the US government’s trade restrictions on the export of semiconductor manufacturing equipment to the country. Some of the leading producers of chip manufacturing technology have almost doubled the percentage of revenue they’ve generated from China since 2022, according to a report from Bloomberg. Applied Materials, a California-based company that supplies equipment, services and software for the manufacture of semiconductors, reported that 44% of revenue generated in the fourth quarter of its fiscal year 2023 came from China, compared to just under 20% in the same quarter of 2022. Lam Research, another California company that provides wafer fabrication equipment and services, saw revenue from China hit 48.5% in September 2023, up from 30% in September 2022. However, in a sign that the US government is taking a no-nonsense approach to enforcing its export restrictions, on the same day Applied Materials published its earnings, it was reported that the US Justice Department was launching a criminal investigation into the organization for purportedly evading export restrictions. The company allegedly sent hundreds of millions of dollars worth of equipment to Shanghai-based Semiconductor Manufacturing International Corp (SMIC), via South Korea and without an export license, Reuters reported, citing a number of unnamed sources. Chinese companies continue to exploit restriction loopholes The accusations levelled against Applied Materials are not the only way China has seemingly been able to navigate its ways around the trade restrictions. According to its annual report released earlier this week, the US-China Economic and Security Review Commission found that Chinese companies are routinely able to bypass the restrictions — which have been placed on chipmaking equipment that can manufacture advanced chips at the 14 nanometer node or below — by claiming the technology they’re purchasing is being used on older production lines. “With limited capacity for end-use inspections, it is difficult to verify the equipment is not being used to produce more advanced chips,” the report said. Suspicions were first raised earlier this year when it was revealed that Chinese telecoms giant Huawei had produced a smartphone containing an advanced 7 nanometer chip. The Huawei Mate Pro 60 contains Kirin 9000s chips — 7 nanometer chips that have been made in China by the partly state-owned SMIC, according to an analysis published by TechInsights, a semiconductor research and analysis organization. SMIC was barred by the US from obtaining the machines necessary for the production of 7nm chips in late 2020 and to date, the most advanced chip SMIC had been known to manufacture was a larger-scale 14nm semiconductor. An investigation by theUS Department of Commerce into how SMIC got hold of the technology is currently under way. Related content opinion Who needs a humanoid robot when everything is already robotic? Elon Musk wants his robots to do everything humans can do. Here's the problem. By Mike Elgan Oct 25, 2024 8 mins Technology Industry Robotics Emerging Technology news Ericsson’s return-to-office policy is causing trouble Ericsson recently tightened its policy for office attendance — but the decision was taken too quickly, according to union officials, forcing some staff to take meetings in the toilets. By Karin Lindström Oct 23, 2024 5 mins Remote Work Technology Industry Staff Management news brief One of the world's largest book publishers adds AI warnings to its books Penguin Random House prohibits generative AI companies from training their large language models on the content of the books. By Mikael Markander Oct 21, 2024 1 min Regulation Technology Industry Generative AI news brief Fake IT workers from North Korea have started blackmailing their victims To avoid falling victim to such scams, companies are advised to conduct a thorough screening of their job applicants. By Viktor Eriksson Oct 21, 2024 1 min Technology Industry Cybercrime IT Operations Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe