Chinese companies are scrambling to secure advanced chip and electronics materials from U.S. suppliers before the new year amid concerns that Washington will impose further export restrictions on the sector, sources familiar with the matter told Nikkei Asia.
Orders to suppliers such as DuPont, Entegris, and Chemours have increased since November and include a wide range of key consumables such as chemical-mechanical polishing pads, filters, specialized containers, advanced lubricants, and high-quality bulbs for inspection and testing, sources said.
They added that the Chinese technology industry is concerned that the U.S. may impose additional restrictions on the use of advanced chip-making materials and designs, in addition to the restrictions already announced.
“China has been increasing its efforts to find local solutions over the past few years, but the quality of chipmaking materials and consumables from some U.S. suppliers is still much better and more stable than local options,” said a chip distributor familiar with the stocking efforts.
DuPont offers high-quality pads commonly used in chemical-mechanical polishing processes, a critical step in chip production. Entegris is a world leader in the supply of filters and FOUPs, specialized plastic carriers used to transport wafers, while Chemours offers critical lubricants used in various types of machinery across a wide range of industries, including aerospace.
In addition to snapping up inputs from American suppliers, Chinese chipmakers and equipment providers are also rushing to find alternative sources for high-end consumables, which are largely controlled by U.S., European, and Japanese suppliers, Nikkei Asia understands. These efforts include trying to replace numerous foreign suppliers of chemicals and materials with domestic suppliers.
“Customers have told me they are concerned that the supply of some key consumables may be at risk of being disrupted, and have asked us to start finding and verifying second sources soon,” said an executive of a chip manufacturing equipment vendor.
The move is in line with China’s campaign to reduce its dependence on American suppliers as the Washington-Beijing technology race heats up. Huawei, which has labored under pressure from the United States for five years, has been a driving force in boosting China’s technology confidence.
U.S. President Joe Biden’s administration announced sweeping new export restrictions this month, adding 140 Chinese organizations, including the country’s largest chip equipment makers, to a trade blacklist. Suppliers have until 2 January or 31 January, depending on the specific restrictions, to complete business deals with blacklisted customers, after which they will need to obtain a license to continue doing business with them.
The U.S. this month also released a supply chain review of mature chip manufacturing in China, stating that only 17% of American companies were able to verify that their products do not contain Chinese chips. The U.S. government announced that it will prohibit government agencies from procuring products containing Chinese chips or services from December 2027.
The Biden administration this week also launched Section 301 investigations into China’s trade practices related to mature or less advanced semiconductors. However, no conclusion will be reached before Biden leaves office next month, and it is unclear whether Donald Trump’s new administration will continue the investigations.
Entegris and Chemours declined to comment. DuPont did not respond to Nikkei Asia’s request for comment.
