Applied Materials, Lam Research tell vendors to follow new restrictions spurred by U.S. government pressure
U.S. Semiconductor Supply Chain: An Industry Shift
The U.S. is intensifying efforts to eliminate Chinese components from its semiconductor supply chains, pushing American chip-tool companies like Applied Materials and Lam Research to find non-Chinese alternatives. According to individuals familiar with the actions of companies like Applied Materials and Lam Research, directives to reduce reliance on Chinese suppliers come from corporate sources rather than formal government mandates. Suppliers have been informed that Chinese investors or shareholders are no longer acceptable, reflecting a broader concern about national security and potential vulnerabilities in next-generation tech supply. While crucial for compliance, this shift brings logistical challenges and potentially higher costs as companies seek non-Chinese suppliers. With the support of hefty funding from the U.S., Japan, and Europe to strengthen local chip manufacturing, the trend also aligns with stricter U.S. export controls, which could strain relationships with a major market like China, where companies like Applied Materials and Lam Research derive a significant portion of their revenue.
My Take
This reshaping of supply chains highlights a critical moment for the semiconductor industry, where national security and business interests are at a crossroads. National security concerns are valid, as relying on Chinese suppliers for critical semiconductor components could expose the U.S. to supply disruptions or potential vulnerabilities in sensitive technology. Sourcing non-Chinese components may push costs, testing industry adaptability in finding reliable, economical alternatives outside China. The moves by major players like Applied Materials suggest a long-term shift in vendor relations, especially for foreign firms indirectly tied to China. This is another signal for China to accelerate its domestic innovation and independence in semiconductor manufacturing.
#Semiconductors #SupplyChain #TechPolicy #USChinaRelations #NationalSecurity #ChipIndustry
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Credit: Wall Street Journal