China’s customs data show that as of April, China’s monthly imports of chip equipment continued to grow year-on-year, hovering around $4 billion.

“Chinese manufacturers who cannot obtain advanced semiconductor equipment are turning to making general-purpose chips,” said Kazuma Kishikawa, an analyst at Yamato Research Institute. This shift has stimulated a surge in exports of Japanese chip equipment that is not subject to trade restrictions.

The latest data released by the International Semiconductor Industry Association (SEMI) shows that due to the sharp decline in the Taiwan region and North American markets, global semiconductor equipment sales shrank by 2% year-on-year to $26.4 billion in the first quarter of 2024.

But at the same time, China’s semiconductor equipment sales in the first quarter reached $12.52 billion, up 113% from the same period last year, maintaining its position as the world’s largest chip equipment market for four consecutive quarters.

The semiconductor industry usually goes through a three- to four-year boom-and-bust cycle. Amid the turmoil of the new epidemic, the global chip market entered a downturn in the second half of 2022, but is now showing signs of bottoming out. Japan’s exports of chip manufacturing equipment grew 13% year-on-year last quarter, the first increase in five quarters.