The head of a major product in the chip supply chain believes that companies will soon stop relying on China to manufacture their products, thanks to new rules from the United States.
“The business model of producing in China and exporting abroad is no longer viable,” said Hideo Tanimoto, President of Kyocera. financial timesAnd Although he added that manufacturing for the Chinese domestic market would still be possible. He pointed to the deterioration of relations between Washington and Beijing: “Obviously, with everything that is happening between the United States and China, it is difficult to export from China to some areas.”
The newly passed regulations are a problem for Japan-based Kyocera, which has 70% of the market share of ceramic components in tools used to make chips. Tanimoto blamed US controls, at least in part, for the company’s decision to cut its expected full-year operating profit by 31%.
Last October, the Biden administration imposed China’s strict export controls, limiting the sale of chips and advanced chip manufacturing equipment to the country’s chip industry.
earlier this year, Japan And the Netherlands – whose companies make the equipment for the latest chips – is too Move to ban exports From this technology to Chinese companies.
Tanimoto pointed out financial times that Japanese companies are “being told not to ship their own unsophisticated gadgets,” the implication being that substandard technology runs counter to geopolitical conflict.
In its recent earnings reports, the company also blamed lower smartphone demand and inflation for its downward revisions to income. Kyocera mentioned $846 million in operating profit in the fourth quarter, down 3.9% from a year earlier.
Companies are considering moving manufacturing out of China, in part to diversify their supply chains after Beijing’s anti-COVID-zero policies disrupted manufacturing. Costs are also increasing, with Tanimoto noting financial times Chinese wages have gone up. apple and Foxconn recently expanded consumer electronics production in both India And Vietnam.
However, despite the rhetoric about secession, trade between China and the United States has taken a beating Record In 2022, with the United States importing $536.8 billion worth of Chinese products.
controls over China
Biden’s new slide controls are Come down semiconductor industry in China. Yangtze Memory Technologies Corp. (YMTC), the largest manufacturer of memory chips in China, has cut orders for some chipmaking equipment by as much as 70%, according to a report. South China Morning Post.
International Semiconductor Manufacturing Company, the largest chip foundry in China, He admitted earlier this month that one of its newer plants would start operating later than expected. The company noted the difficulty in obtaining advanced equipment.
Both SMIC and YMTC are on the US Entity List. US companies cannot sell certain advanced technologies to companies on the list without a license from the US government.
Beijing, for now, has not yet imposed retaliatory measures on US officials Taking into account the Export controls over advanced technologies used to create advanced solar chips. China produces 97% of these components.
Instead, Chinese officials are ramping up funding for advanced technologies, with Guangzhou on Monday declaring A new $29 billion fund to invest in semiconductors, renewable energy and other high-tech industries.
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