Sina reported on October 4, that Semiconductor Manufacturing International Corporation (SMIC), China's partially state-owned publicly-listed semiconductor foundry company, is scaling up its procurement from upstream suppliers in the United States, Europe, and Japan, with a size exceeding a full-year’s demand for 2020. The procurement items include etching, lithography and wafer cleaning equipment. The purchase of consumables used to maintain the operation of the equipment is also more than one year’s need. SMIC is even cooperating with other Chinese chip manufacturers to establish a shared reserve of such parts and has established a central warehouse to store these products. This follows the U.S. Department of Commerce placing an export restriction on its suppliers. Sina quoted a source from a U.S. chip equipment manufacturer who said that SMIC is eager to stock up on equipment. The company ordered more equipment than needed for its current expansion plan. At the end of last year, ASML (ASML.US), Europe’s largest chip manufacturing equipment manufacturer, shipped advanced extreme-ultraviolet lithography (EUV) chip production tool to SMIC. However, the transaction has been put off. SMIC relies heavily on foreign semiconductor equipment suppliers, including U.S. based Applied Materials, Lam Research, KLA, Taradyne, ASML in the Netherlands and Tokyo in Japan.
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