China Chip event Draws Applied Materials, others Despite U.S. Tensions

Leading global companies eager to stay in biggest semiconductor market

A chip industry conference that kicked off here Tuesday has lined up major U.S. companies as participants despite Washington's widening restrictions on sales of cutting-edge semiconductor technology to China.

Applied Materials, Lam Research and KLA are among the main sponsors of the event as is German industrial group Siemens, according to conference materials.

The high-profile sponsorships attest to industry players' eagerness stay connected with China, the world's biggest market for semiconductors and the equipment used to make them.

Losing the Chinese market would not only hurt global earnings, but also cede growth opportunities to Chinese competitors, said an industry executive.

Supply chain innovation is a theme of the event, which follows an escalation of the Biden administration's efforts to cut off China's access to the means of producing advanced semiconductors. This campaign has seen Washington impose export restrictions on American technology and urge partners like Japan and the Netherlands to do the same.

The U.S. and its allies are trying to keep China down in advanced fields, but Beijing will accelerate efforts to promote "Chinese-style" self-reliance in semiconductors, Wei Shaojun, professor of microelectronics at Tsinghua University, told the conference.

China's chip industry enjoys powerful backing from the state. But in terms of advances in semiconductor production, its cutting edge is at only the 14 nanometer level. To reach 2 nm or 3 nm levels that the world's leading chipmakers are pushing, Chinese chipmakers will have to rely on foreign technology. The smaller the nanometer number, the more powerful the chip.

Wei said that given the Chinese market's size, global chip industry companies can hardly afford to abandon it.

Applied Materials distributed promotional materials at the event. For some sponsors, presentations at the event were scheduled to highlight current and future development plans.

China led the world in sales of semiconductor manufacturing equipment for a third straight year in 2022, according to SEMI, a trade group. Sales accounted for nearly 30% of the global total and fell by just 5% despite the disruption caused by the now-ended zero-COVID lockdowns and pressure from U.S. trade restrictions.