Illustration: Xia Qing/GT

The Chinese mainland will continue to invest more in new computer chipmaking equipment than any other geographical region in 2025, despite a significant year-on-year decline, Reuters reported, citing a report released by industry group SEMI on Wednesday. Although the US is intensifying its crackdown on China's semiconductor sector, the latter's position as the global frontrunner in chipmaking equipment investment signals the continued advancement and refinement of its domestic semiconductor supply chain.

China is the largest consumer of chips and firms in the country have been expanding their chipmaking capacity for years, Reuters reported. Based on this, China has cultivated a burgeoning market for semiconductor manufacturing equipment, which can also be described as a landscape ripe with market opportunities. 

According to SEMI, the Chinese mainland became the biggest market for new semiconductor equipment for the first time in 2020, with sales up by 39 percent to $18.72 billion. In the following years, the mainland ramped up its purchases of chipmaking equipment. SEMI reports show that the mainland purchased about $25 billion worth of chipmaking equipment in the first half of 2024, more than the combined total of the US, South Korea, the Taiwan region and Japan, CNBC reported.

Over the past few years, the US, under the pretext of national security, has continuously pressured certain allies in an attempt to jointly restrict exports of high-end semiconductors and chip manufacturing equipment to China. This has put pressure on both China's and these US allies' industrial chains, disrupting the global semiconductor supply chain. In response to external pressures, China has focused on technological self-reliance and made efforts to achieve breakthroughs in cutting-edge technology. 

As shown by SEMI data, China has consistently increased its spending on chip manufacturing equipment, further expanding its domestic semiconductor industry chain. In 2024, China's integrated circuit exports grew by 17.4 percent year-over-year, reflecting the continuous improvement in the country's chip production capabilities and the ongoing expansion of its semiconductor industry chain. The restrictions imposed by the US in recent years have not hindered the continuous development and growth of China's semiconductor industry.

It is anticipated that China's semiconductor industry, particularly the mature process chip sector, will continue to expand in the coming years. Despite short-term fluctuations in the country's investment in chipmaking equipment, it is expected that China will retain its status as a pivotal market for chipmaking equipment in the medium to long term.

Japan and the Netherlands are leading producers of semiconductor manufacturing equipment. For companies in these nations, seizing the opportunities presented by China's chipmaking equipment market is essential for sustaining their competitive position in the global landscape.

ASML, the world's top supplier of advanced chipmaking equipment, may have a profound understanding of this point. According to the South China Morning Post, China is ASML's largest market, accounting for 36.1 percent of its total sales in 2024. One thing is very clear: ASML cannot afford to lose China, a crucial global market for chipmaking equipment. European policymakers should do more to help ASML and other chipmaking equipment manufacturers to strengthen their cooperation with the Chinese market, rather than the opposite.

A recent article in The Economist reported that ASML's CEO, Christophe Fouquet, said that the continent's champions could move elsewhere if they are not better protected. This clearly indicates that for European policymakers, formulating independent policies to maximally protect Europe's chipmaking equipment manufacturers has become a matter of urgency.

How can European chipmaking equipment manufacturers be protected? Fundamentally, it is crucial not to hinder their access to the world's largest chipmaking equipment market. The latest SEMI report underscores this point: despite the ongoing US suppression of China's chip industry, China is expected to lead in chipmaking investment again in 2025, with the Chinese chipmaking equipment market still brimming with potential and opportunities.

The US restrictions cannot contain the expansion of China's semiconductor industry chain. Its market potential means that for international chipmaking equipment manufacturers, enhancing mutually beneficial cooperation with China is not only a rational choice but seemingly the only option.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn