China’s Chip Push Helping Japan Chip Suppliers to New Highs
China Taking On US Fuels $147 Billion Rally in Japanese Chip Stocks!
Japanese chip equipment makers increasingly reliant on China
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China Taking On US Fuels $147 Billion Rally in Japanese Chip Stocks, via Bloomberg#semiconductor #chips #japan #China pic.twitter.com/GlfGuyUKFL
— The_Journalbiz (@the_journalbiz) February 14, 2024
Chart: Japan Ministry of Finance
Japanese producers of chipmaking equipment are capitalizing on surging demand from China, catapulting their shares to new heights while helping build out a tech supply chain the US has warned may be a threat to global security.
In the 16 months since the US and its allies began curbing exports of advanced chip technology, China has amped up the purchase of legacy equipment to make older-generation semiconductors. Its effort toward some self-sufficiency has been a boon for the likes of Tokyo Electron Ltd., which added $12 billion to its market value Tuesday after hiking its outlook citing a record proportion of sales going to China.
Revenue has soared at Japanese suppliers that compete with the likes of Applied Materials Inc., Lam Research Corp. and Teradyne Inc. China’s become the single largest destination for a growing number of Japanese companies that make equipment used to wash, clean, pattern, and cut silicon.
That reliance is likely to grow further, executives said on recent earnings calls, pointing to strong demand from Chinese makers of logic and power semiconductors.
The MSCI Japan Semiconductor and Semiconductor Equipment Index has more than doubled, with its companies gaining $147 billion in value since the Biden administration heightened restrictions on China’s access to US chip technology in October 2022.
The market cap of Japanese chip gear makers has shot up since US escalated trade sanctions on China
