According to sources familiar with the matter, the Biden administration is planning to expand the scope of comprehensive semiconductor export controls on China, in line with Japan's recently upgraded restrictions. Japan added 23 types of equipment to its existing list in July, some of which surpass current U.S. limits. The move aims to match Japan's measures and strengthen export controls on cutting-edge equipment used for cleaning and etching, which are crucial for advanced semiconductor processes. Kyodo news agency reported this development, and it could potentially lead to increased tensions between Washington and Beijing.

Sharron Cook, the senior export policy analyst at the U.S. Department of Commerce's Bureau of Industry and Security, has confirmed ongoing efforts to finalize a rule that will modify China-related chip export controls issued last October. However, Hillary Hess, the director of regulatory policy at BIS, stated that the rule will not be released immediately and has not been sent to other agencies for review yet.

Kyriakos Petrakakos, an expert in the semiconductor equipment industry, recently suggested that the export controls imposed by the U.S., Japan, and the Netherlands on China's semiconductor technology may result in the long-term acceleration of China's semiconductor industry chain, despite short-term challenges. Petrakakos further argued that the U.S. attempt to block China's equipment industry through export controls might inadvertently fuel a positive feedback loop for the Chinese industry. He points out that even before global semiconductor companies began to withdraw products from the Chinese market due to export controls, local Chinese suppliers were already stepping in and replacing them. This trend has intensified since the implementation of the export ban. For the quarter ending March 2023, China's five largest listed equipment vendors experienced a revenue growth rate of 35 percent, compared to 28 percent for the four largest global listed equipment vendors conducting business in China (excluding Applied Materials, which does not report data on the Chinese market).

Petrakakos predicts that this trend will persist, resulting in Chinese vendors gaining a larger net share of the market, and the U.S. export controls on China have seemingly achieved what two decades of industrial policy failed to do: boost China's semiconductor equipment industry.

*Disclaimer: The news in this article originated from Jiewei.com, organized by Yuanxin Ai electronic, for learning and reference only.