In a bid to circumvent US-led restrictions on its semiconductor industry, China significantly increased its imports of chipmaking equipment in 2023, spending up to $40 billion, according to a Bloomberg report. This marks the second-highest annual spend on chipmaking machinery since 2015 and showcases China’s unwavering commitment to developing a self-sufficient semiconductor industry.

Despite a 5.5% decline in overall imports last year, China prioritized artificial intelligence advancement and chipmaking self-reliance, strategically allocating resources to secure crucial equipment. The US and its allies have imposed export controls on advanced chipmaking technology, aiming to impede China’s high-tech progress.

Anticipating further restrictions, China ramped up imports from the Netherlands, particularly in lithography equipment, the cornerstone of chip production. Dutch company ASML Holding, a major supplier of this technology, had already cancelled shipments of its top-of-the-line machines to China at the behest of the US government, further highlighting the importance of diversifying China’s supply chain.

China’s aggressive push towards chip independence underscores the rising geopolitical tensions in the semiconductor industry. This strategic move could have far-reaching implications for global technology development and supply chains, making it one of the most critical technological and economic battlegrounds of the 21st century.