Japan is making a lot of money by selling chip making machines to China

steve saldana

senior editor

Technology and science journalist. I write and analyze the tech platform industry in Mexico and I’m a fan of tech ethics. I am also a member of the Mexican Network of Science Journalists. I do commercial voiceovers, produce podcasts, and host the weekly ROM Podcast. Linkedin

In the trade war between the United States and China, the centerpiece of the game is chips. Everyone knows it, and China’s need to be self-reliant has benefited one player: Japan.

how to start again bloombergJapan has been making a lot of money for over a year, $12 billion in fact, from selling machinery to China to make chips from relatively old technology. China, which has achieved significant development to achieve large-scale production processes, has obtained silicone treatment machines from Japanese producers and as a result, the benefits have been enormous. The Japanese Semiconductor Index has increased by $147 billion in one year and three months.

china money

China has made great efforts to become self-reliant so that it does not have to depend on the United States and allies at all, especially after several major technology disruptions to develop cutting-edge and artificial intelligence chips. China’s alternative is to invest in increasing production of chips made in the 28-nanometer process and continue to develop more advanced chips, such as the recent chips made in seven nanometers that would have been made within China.

No matter what the destination is, machinery is needed for the journey., Japanese manufacturers know this. Tokyo Electron Limited has seen huge growth in business. In mid-February, its value increased by $12 billion after it announced that expectations for its sales in China had reached a new record.

So much money for business is good for investors and the Japanese manufacturing segment, but not so for the United States. Such a strong relationship of interdependence has been established between Japan and China, which could jeopardize the careful trade blockade imposed to block China’s latest generation chips. On the other hand, according to data, Japanese producers can no longer stop selling to China bloombergMore than half of Tokyo Electron’s sales are already to China.

The profits are not being monopolized by Tokyo Electron. Other appliance producers also saw their profits rise. Disco Corp. will have 40% of its sales destined for China and Kokusai Electric Corp. is hiring more employees to meet China’s needs, raising again bloomberg,

risk to everyone

From Japan’s perspective, there are two hidden risks. The first is the secrecy with which China manages its production lines and how it is still uncertain whether it can achieve mass production of chips and keep up with the demand for silicon treatment equipment. The second, of course, is the United States. The immediate predecessor is so close that it is easy to reference. Earlier this year, the Netherlands halted the sale to China of some deep ultraviolet lithography systems, essential equipment for semiconductor manufacturing.

Japan does not act independently and also has limitations on exports of ultraviolet lithography technology and maintains a strict control list for semiconductors for military use. Despite the limitations and the fact that Japan has sought to reduce its dependence on purchases from China, the numbers show that relations are only getting closer.

According to financial TimesDespite the United States, China is about to reach its new peak in chip production. SMIC will manufacture chips in a five-nanometer process and, according to reports in early February, the production line will focus on Kirin chips Will be used in premium versions of Huawei cell phones,

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