Soaring 82%! Japanese lithography machines are selling crazy in China, and the Dutch giant ASML is going to be completely cool?
The chip manufacturing equipment market under the struggle for technological hegemony
In the process of rapid technological development, chips have undoubtedly become the key foundation to support all kinds of high-tech. From smartphones to artificial intelligence, from industrial automation to unmanned driving, advances in chip technology continue to drive innovation and development in various fields. However, the chip industry has also become the focus of scientific and technological competition between countries.
In recent years, in order to maintain its technological supremacy, the United States has frequently taken restrictive measures to suppress the development of China's chip industry. This not only triggered a scientific and technological conflict between China and the United States, but also affected the pattern change of the entire global chip industry chain. In this escalating technology war, a Dutch company called ASML seems to have become a key "pawn".
ASML: Caught in a geopolitical maelstrom
As the world's largest supplier of semiconductor manufacturing equipment, ASML produces lithography equipment that plays a key role in chip manufacturing. However, due to political pressure from the United States, ASML has had to make a difficult choice between defending its own interests and responding to geopolitical demands.
Since 2018, when the U.S. government began restricting exports of advanced semiconductor technology to China, ASML has been caught in a dilemma. On the one hand, the Chinese market has always been one of ASML's main sources of revenue, with huge demand and huge development potential. On the other hand, if it does not cooperate with the US lockdown measures, ASML will also face the risk of being included in the "Entity List", which will seriously affect its operations in the global market.
Under the pressure of this contradiction, ASML finally chose to actively respond to the request of the United States and suspend the export of advanced lithography equipment to China. This undoubtedly cast a shadow on China's semiconductor industry, and also put ASML in the dilemma of losing the Chinese market.
Japan took advantage of the situation to seize the Chinese semiconductor market
At the same time that ASML was forced to stay away from the Chinese market, another semiconductor equipment giant, Japanese companies, began to rush in.
According to the data, in the first three months of 2024, Japan's sales of semiconductor manufacturing equipment in the Chinese market surged by 82%, accounting for 50% of total exports. Among them, Tokyo Electron's revenue in Chinese mainland increased by 46.9% year-on-year. It can be said that Japanese companies are rapidly filling the gap in ASML in the Chinese market.
The key reason why Japan was able to seize the Chinese market so quickly is that it met two conditions at the same time: first, the huge demand for advanced semiconductor manufacturing equipment in the Chinese market is still growing; Second, Japanese companies have strong competitiveness in this field and can quickly respond to the needs of the Chinese market.
In stark contrast, ASML has been forced to stay away from the Chinese market, which undoubtedly creates a great opportunity for Japanese companies. Japanese companies have seized the opportunity to rapidly expand their market share in China, which is bound to have a profound impact on the global semiconductor industry pattern.
The urgency of China's semiconductor industry to be independent and controllable
For China, the U.S.-initiated technology blockade undoubtedly highlights the urgency of its semiconductor industry to achieve autonomy and control.
China has long relied on imports to meet its demand for semiconductor products. However, as the United States continues to tighten export controls to China, this dependence has become a "bottleneck" restricting China's scientific and technological development. Especially in the critical field of semiconductor manufacturing equipment, China is almost entirely dependent on foreign companies such as ASML. Once these companies are forced to withdraw from the Chinese market, China's semiconductor industry chain will face severe challenges.
To this end, China is increasing its independent research and development of key semiconductor technologies in an attempt to break the technological blockade of the United States. From lithography equipment to advanced process chips, Chinese companies are making unremitting efforts to narrow the gap with the international advanced level. At the same time, China is also actively looking for alternative partners, such as Japan, to maintain the security and stability of its own industrial chain.
There is no doubt that this tech wrestling is an uphill battle for China. However, China must rise to the challenge, accelerate the pace of independent innovation in the semiconductor industry, and ensure the safety and controllability of key core technologies. Only in this way can China truly break free from the scientific and technological constraints of the United States and gain a firm foothold in the fierce international competition.
ASML is in a dilemma and its relationship with China is at stake
For ASML, the current situation is not all smooth sailing.
On the one hand, ASML, as a monopoly supplier of global lithography equipment, has long been an important support for the development of China's semiconductor industry. With the continuous expansion of the Chinese market, ASML used to enjoy very rich revenue and profits here.
But on the other hand, due to political pressure from the United States, ASML had to suspend the supply of advanced lithography equipment to China. This has undoubtedly seriously damaged ASML's position and influence in the Chinese market. What makes ASML even more tricky is that once it loses this important market, its future development prospects will also be full of uncertainty.
Not only that, but ASML also faced challenges from other competitors. Japanese companies are rapidly seizing the Chinese market, which undoubtedly intensifies the competitive pressure on ASML in the global lithography machine market. If ASML continues to maintain the status quo, it will not only lose its dominant position in China, but also its global market share may further decline.
As a result, ASML has had to strike a balance between defending its own interests and responding to geopolitical demands. But whatever choice it makes, it could have a profound impact on ASML's future prospects. This is undoubtedly a difficult choice.
Overall, this wrestling around the chip manufacturing equipment market reflects the complexity of the current international competition in the field of science and technology. ASML's situation shows that even the world's leading technology companies are not completely free from the influence of geopolitics. For China, accelerating the independent innovation of the semiconductor industry and realizing the independence and controllability of key core technologies has become the most urgent strategic task at present. Only in this way can China continue to occupy an advantageous position in the fierce competition in science and technology.
Japan is taking advantage of the rise of the situation, and ASML is seeking a way out of transformation
Faced with the drastic changes in the Chinese market, ASML was in a dilemma. On the one hand, the loss of China's huge market will undoubtedly seriously affect its future development prospects. On the other hand, if it does not cooperate with the political demands of the United States, ASML will also face the risk of being included in the "Entity List", which will seriously damage its position in the global market.
While ASML is struggling with how to deal with this dilemma, another semiconductor equipment giant, Japanese companies, has taken advantage of the situation and began to enter the Chinese market in a big way. According to the data, in the first three months of 2024, Japan's sales of semiconductor manufacturing equipment in the Chinese market surged by 82%, accounting for 50% of total exports. Among them, Tokyo Electron's revenue in Chinese mainland increased by 46.9% year-on-year. It can be said that Japanese companies are rapidly filling the gap in ASML in the Chinese market.
Behind this change is not only the continued strong demand for advanced semiconductor manufacturing equipment in the Chinese market, but also the strong strength of Japanese companies in this field. In contrast, ASML's decision to stay away from the Chinese market has undoubtedly created a great opportunity for Japanese companies. Japanese companies have seized the opportunity to rapidly expand their market share in China, which is bound to have a profound impact on the global semiconductor industry pattern.
For ASML, the current situation is even worse. On the one hand, it has lost an important market in China, which affects its future development prospects. On the other hand, in the face of strong challenges from competitors such as Japan, ASML's dominant position in the global lithography machine market is also threatened.
Under these circumstances, ASML had to start looking for a new way out of transformation. One possible option is to seek collaboration with other semiconductor equipment manufacturers to co-develop more advanced manufacturing technologies to cope with increasing market competition. Alternatively, ASML could consider shifting its focus to other emerging markets, such as Europe and Japan, to diversify its risk.
Whatever strategy ASML adopts, it must strike a balance between defending its own interests and responding to geopolitical demands. This is undoubtedly a difficult choice, but ASML must make the right choice as soon as possible, otherwise its position in the global semiconductor equipment market will be further shaken.
At the same time, China must also accelerate the pace of independent innovation in the semiconductor industry and narrow the gap with the international advanced level. Only by achieving independent and controllable key core technologies can China get rid of the scientific and technological constraints of the United States and gain a firm foothold in the fierce international competition. This is not only related to the future of China's science and technology, but also directly affects the trend of the global semiconductor industry pattern.
Overall, this wrestling around the chip manufacturing equipment market is profoundly changing the pattern of the global semiconductor industry. ASML's situation reflects the complexity of the current international competition in the field of science and technology, and also highlights the urgency of China's independent innovation. Only by working together can we ensure the stable development of this critical industry for the benefit of all mankind.