Chinese Chip Equipment Maker Sees Profits Surge

Advanced Micro-Fabrication Equipment China (AMEC), China’s biggest provider of semiconductor etching tools, said earnings and revenue jumped in the first half of the year as local chip manufacturers looked for alternatives after last year’s US sanctions.

Founder and chief executive Gerald Yin, a 20-year Silicon Valley veteran, said the firm had seen strong domestic demand after export controls from the US, Japan and the Netherlands stopped Chinese firms from buying high-end chipmaking tools manufactured in those countries.

As a result Shanghai-based AMEC saw net profit rise 114 percent year-on-year to 1 billion yuan ($137m, £109m) while revenue increased 28 percent to 2.53bn yuan.

The company also saw a dramatic rise in its domestic market share for the two main types of etching equipment it manufactures.

Equipment blockade

Yin said he expects AMEC’s share of capacitively coupled plasma (CCP) etching equipment to reach 60 percent in the near future, up from 24 percent last October, and its share of inductive coupled plasma (ICP) tools to reach 75 percent from almost zero.

Previously nearly all of China’s ICP etching tools were provided by US-based Lam Research, which has seen its share drop sharply since the export restrictions were announced.

The Chinese mainland chip equipment manufacturing market overall dropped 33 percent year on year in the first half, more than a worldwide 23 percent decline amidst falling demand for consumer electronics.

AMEC said it has excluded three senior executives with US citizenship from its key technology personnel board due to US sanctions that restrict citizens and green card holders from providing services to China-based chip firms, the first time a Chinese company has publicly disclosed senior staff changes caused by the US controls.

‘We can’t accept this’

Earlier this month Yin told a conference that the US was aiming to stall China’s chipmaking capabilities at a 28-nanometre manufacturing process, which he called “at least five generations” behind the global leading edge of 3nm to 14nm.

“We can’t accept [this],” he said at the time.

He added that the October export controls were the most “lethal” move since the US began introducing sanctions against Chinese tech firms in 2019.

But he said China should be able to develop a globally competitive level of domestic chip manufacturing tools within years due to the return of US-trained Chinese experts.

In 2021 AMEC was included for a brief time on a list of companies that allegedly support the Chinese military, but was removed after “four months of intense negotiations”, Yin said.