US probe finds China bought $49 billion in chipmaking gear despite export curbs

SAN FRANCISCO - US lawmakers are calling for broader bans on chipmaking equipment to China after a bipartisan investigation found that Chinese chipmakers had purchased US$38 billion (S$49 billion) of sophisticated gear in 2024.

Inconsistencies in rules issued by the US, Japan and the Netherlands have led to non-US chip equipment manufacturers selling to some Chinese firms that US companies could not, according to a report published on Oct 7 by the US House of Representatives Select Committee on China.

The committee called for broader bans by the US and its allies on chipmaking tool sales to China, rather than narrower bans on sales to specific Chinese chipmakers.

The US$38 billion was purchased from five top semiconductor manufacturing equipment suppliers, without breaking the law, a 66 per cent increase from 2022, when many of the tool export restrictions were introduced.

That accounted for nearly 39 per cent of the aggregate sales of Applied Materials, Lam Research, KLA, ASML and Tokyo Electron, the report found.

“These are the sales that made China increasingly competitive in the manufacture of a wide range of semiconductors, with profound implications for human rights and democratic values around the world,” the report said.

Both US Democratic and Republican administrations have sought to restrict China’s ability to make microchips – crucial to fields such as artificial intelligence (AI) and military modernisation.

The two economic superpowers are also vying to sell advanced technology such as AI data centres to other nations.

Mr Mark Dougherty, president of Tokyo Electron’s US unit, said the industry’s China sales have started to decline in 2025, in part due to new regulations, and welcomed more coordination between the US and Japanese governments.

“I think it’s clear, from a US perspective, there’s an outcome that is still desired that has not yet been achieved,” Mr Dougherty told Reuters in an interview.

ASML and KLA declined to comment. Applied Materials and Lam Research did not respond to a request for comment.

The committee said the toolmakers cooperated with the committee on the report and were informed of its findings.

Three Chinese firms that have become major customers of toolmakers – SwaySure Technology, Shenzhen Pengxinxu Technology and SiEn (Qingdao) Integrated Circuits – are of particular security concern.

They were flagged in 2024 by the congressional committee’s leaders in a letter to the US Commerce Department, alleging ties to a secret network aiding Huawei Technologies, and US officials barred exports to them in December 2024.

The report recommended that the broader bans include tighter restrictions on components that China could use to build its own chipmaking tools.

“China is attempting to rewrite the entire supply chain,” said Mr Craig Singleton, a senior fellow at the Foundation for Defence of Democracies, a think-tank.

“What used to be niche tool segments are now battlegrounds.” REUTERS