How much money does China spend?

China to spend huge in first half of 2024, media reports say 25 billion dollars on equipment for the production of microcircuits. This is a new record, eclipsing similar spending by the United States, South Korea and Taiwan.

Looking at the numbers in more detail, China accounted for 49.9 percent of Tokyo Electron’s revenue in the quarter ending in June. Similarly, ASML, Applied Materials, Lam Research and KLA accounted for 49 percent, 32 percent, 39 percent and 44 percent of their total revenue last quarter, thanks to Beijing’s relentless buying activity.

Also on September 2, China threatened Japan with severe economic retaliation if Japan continued to restrict the sale and service of chip-related equipment to Chinese firms, vowing to deprive Tokyo of critical raw materials and minerals needed for car production. Beijing currently holds a monopoly on the supply of rare earth metals, so it is using its influence to its full potential.

When China catches up

Chinese chips are not yet competitive with the best products from companies like TSMC, but they are very close so far. Recently, some companies, especially Huawei, have announced developments, including processors made using the 7-nanometer process. Much of the sudden performance increase of these chips is achieved thanks to a more efficient overall design.

There are also rumors like that SMIC achieves 5-nanometer process Without ASML sub-certified equipment. SMIC produces Kirin chips for Huawei. Although there is no confirmation yet, Shimizu experts who compare 7nm processors with products from US and European competitors say that they are “not far from reaching the competition”. So it is likely that Chinese manufacturers have managed to find a way here.

According to the latest rumors; Chinese chips are just three years behind TSMC. This was largely possible thanks to US sanctions, as the bans brought new incentives for development. Realizing that access to cutting-edge technology would be out of the question, the Chinese government began to invest more and more, which led to the rapid development of local companies and the development of supply chains.