Lam Research, ASML Lead Surge In Revenue From China Despite US Trade Curbs

Leading chipmaking equipment manufacturers are experiencing a surge in revenue from China as the country stockpiles equipment to counter U.S. trade restrictions on advanced semiconductors.

In the most recent quarter, significant chip suppliers of fabrication machinery obtained more than 40% of their revenue from Chinese customers.

Also, the recent tightening of U.S. export restrictions on advanced chip technology has not yet resulted in reduced sales to China for equipment manufacturers. It may have accelerated orders.

Also Read: Nvidia Likely to Outperform in Data Center and Gaming Segments: Goldman Sachs Analyst

• Lam Research Corp LRCX generated nearly half of its revenue from China, Bloomberg reports.
• Tokyo Electron Ltd. also hit a record in the share of its shipments to China.
• Despite a ban on shipping its most advanced systems to China, ASML Holding NV ASML saw a high proportion of its revenue come from Chinese sales.
• Applied Materials Inc AMAT reported significant China sales in the October quarter, expecting elevated sales in the current period. The company anticipates China's share gradually returning to its typical 30% level over time.

What's Next: Industry experts suggest that China's front-loading of existing orders to bypass potential future export restrictions may not be sustainable in the medium term. Stricter export rules could impact China's ability to maintain its high growth rates in chip equipment purchases. 

Furthermore, a U.S. criminal investigation into Applied Materials for alleged violations of export restrictions to China. The case has caused concerns in the industry, affecting the company's stock and its peers, including KLA Corp KLAC and Lam.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.