(JW Insights) April 21 -- Semiconductor equipment giants ASML and Lam Research said that they expect sales to China to boom later this year despite US export restrictions on equipment used to make cutting-edge semiconductors, reported Reuters on April 20.

The comments by California-based Lam Research and the Netherlands' ASML Holdings are a sign that China may be a bigger customer for the industry than expected this year given its strong demand for less-advanced chips like those used in electric vehicles (EVs).

The companies reported quarterly earnings that beat analyst expectations, though Lam's sales were lower than a year ago because of a downturn in the memory market.

Both also said they expect sales to Chinese companies to increase in the coming months despite the US imposing sweeping restrictions on China's semiconductor sector in October.

Lam is subject to the US export restrictions, and ASML will face new rules from the Dutch government on China sales later this year. But those rules so far have only affected equipment used in making the most advanced chips, said Reuters.

ASML said it has a backlog of about EUR39 billion, the equivalent of about two years of tool shipments. Chief Executive Peter Wennink told investors during a conference call that Chinese customers working to make less advanced chips make up about 30% of those orders. That's a jump from November, when ASML said China made up 18% of its then EUR38 billion backlog.

Wennink said those Chinese chipmakers were focused on markets like electric vehicles, which require many more chips than their combustion-engine counterparts. Most of those chips do not require ASML's most advanced tools.

Later this year, ASML will have to start applying for Dutch export licenses for what are called immersion deep ultraviolet lithography machines (DUV) for shipment to China after the US, Dutch and Japanese governments agreed to begin regulating the tools, according to the report from Reuters.

(Gao J)