By Li Panpan

(JW Insights) Jul 26 -- China's semiconductor equipment imports from Japan during the first half of 2023 reached $4.83 billion, a year-on-year decrease of 13.2%. In June, the number was $804 million, down by 10.5% year on year but up by 41.6% month-on-month, said a JW Insights report titled “China's Semiconductor Import and Export Data - Equipment Imports from Japan.”

Japan government’s restrictions took effect on July 23 on the sale of 23 types of chip-making tools, including gear used to remove impurities generated in the semiconductor-manufacturing process, to any country not on its list of 42 "friendly" markets. The move is expected to hurt China’s import.

In 2022, China's total imports of semiconductor equipment were valued at $34.719 billion. Those from Japan reached $10.736 billion, accounting for 30.9%, said data from the General Administration of Customs of China (GACC).

From 2015 to 2022, Japan has always been the largest source of imports of semiconductor equipment for China, accounting for about 33% on average. The proportion was slightly higher in 2017 and slightly lower in the past three years, accounting for about 31%. The import value showed a growth trend from 2015 to 2021, with a compound growth rate of 18.3%, and decreased by 16.9% year-on-year in 2022.

In the second quarter of 2023, China's semiconductor equipment imported from Japan was $2.281 billion, down by 10.5% quarter on quarter and down by 10.1% year on year, showed data from GACC.

Judging from the import data from the first quarter of 2018 to the second quarter of 2023, the import volume in the third quarter of each year accounts for a relatively high proportion of that year. Therefore, the import volume in the third quarter of 2023 is expected to increase, but due to the export control, the import volume might continue to decline in the third quarter, said the JW Insights report.

From January to June 2023, China's top five semiconductor equipment imports (except other categories) from Japan are "plasma dry etching machines for manufacturing semiconductor devices or ICs," "heat treatment like oxidation and diffusion equipment for manufacturing semiconductor devices or ICs," "step-and-repeat lithography machines for manufacturing semiconductor devices or ICs," "other etching and stripping equipment for manufacturing semiconductor devices or ICs" and "grinding equipment for manufacturing single crystal columns or wafers." Among them, imports of plasma dry etching machines, step-and-repeat lithography machines, and grinding equipment increased year-on-year.

In June, the above five items all increased month-on-month, among which step-and-repeat lithography machines, etching, and stripping equipment increased by more than 100% month-on-month.

According to the locations of registered companies, China's top five provinces of semiconductor equipment imports from Japan during the first half of 2023 are Hubei ($928 million), Shanghai ($820 million), Jiangsu ($589 million), Guangdong ($580 million) and Zhejiang ($395 million), accounting for 19.2%, 17.0%, 12.2%, 12.0%, and 8.2% respectively, showed data from GACC, said the JW Insights report.