China's imports of Dutch lithography machines have surged this year, with sales in the first seven months of the year exceeding ASML's full-year 2023 forecast, according to a report recently released by semiconductor consultancy JW Insights.

From January to July 2023, the number of lithography machines – mainly from ASML – imported by China increased by 64.8% to $2.58 billion.

ASML forecast in January 2023 that sales to China would stabilize this year at around $2.36 billion, or 14% of annual revenue. In July 2023, China imported $626 million worth of lithography machines from the Netherlands, eight times higher than a year earlier.

ASML has a near-monopoly on the high-end lithography machines needed to make advanced chips. Under pressure from the US, the company has stopped exporting its extreme ultraviolet (EUV) lithography machines to China. Until now, it has continued to sell its less advanced DUV lithography machines, but that may soon change.

Under new Dutch regulations that came into effect on September 1, ASML must obtain a license to sell its most advanced DUV lithography machines, a blow to China’s semiconductor industry. As a result, Chinese companies are racing to stockpile the machines to meet production needs as long as possible.

The report shows that from 2015 to 2022, Jiangsu, Shanghai and Beijing were the largest importers of ASML printers. Strong demand from China helped to offset the decline in the global semiconductor industry and boost ASML sales this year.

In early 2023, the Chinese government criticized the US for “forcing” other countries to block technology from China and undermining international trade, market rules, and the stability of the global economic chain. Chinese media reported that Shanghai Micro Electronics Equipment Co. could provide lithography machines capable of producing 28nm chips by the end of 2023.

(According to SCMP)

The US presidential election will take place in 2024, causing the Biden government to proactively "cool down" the embargo on Chinese semiconductors, stabilizing the external supply chain to focus on internal political issues.