As U.S. curbs continue to reshape supply chains, China is accelerating its push for semiconductor self-sufficiency and increasingly sourcing critical chipmaking tools from outside the U.S. According to Nikkei, imports of such equipment from Malaysia and Singapore surged in 2025, surpassing shipments from the U.S.  As the report notes, direct imports from the U.S. fell by more than 34% to around $2 billion, the lowest level since 2017.

The report states that while the Netherlands and Japan remain China’s main external sources of semiconductor manufacturing equipment by shipment origin, imports from the two Southeast Asian countries hit record highs. Shipments from Singapore reached $5.7 billion, up more than 17% year over year, while those from Malaysia totaled $3.4 billion, more than doubling from 2024.

China’s Equipment Sourcing Reportedly Shifts to Southeast Asia

Regarding the increase in China’s chipmaking equipment imports from Malaysia and Singapore, analysts cited in the report say that U.S. toolmakers have been expanding manufacturing capacity in the region to better serve customers outside the U.S. Lam Research is expanding its manufacturing footprint in Malaysia to meet rising equipment demand. Singapore, meanwhile, has become a key overseas hub for U.S. toolmakers, with companies such as Applied Materials and KLA establishing manufacturing operations there.

As the report further notes, the three leading U.S. chip equipment makers generated nearly $19 billion in combined revenue from China in fiscal 2025—well above figures suggested by customs data based on shipment origin—highlighting the effectiveness of their production diversification strategies.

China’s Equipment Landscape: Global Sourcing Meets Local Surge

Still, Japan remains a major source of China’s chipmaking equipment imports. According to the report, cumulative imports from Japan exceeded $42 billion between 2020 and 2025, followed by about $35 billion from the Netherlands. Japan is home to key suppliers such as Tokyo Electron, Screen Semiconductor Solutions, and Ebara, while the Netherlands hosts ASML, the world’s largest chip tool maker, along with ASM and Besi. At the same time, amid U.S. restrictions, China’s domestic chip equipment makers are seeing strong growth in 2025, led by Naura, AMEC, ACM Research, and Piotech.

Looking ahead, the U.S. is reportedly considering new legislation to further tighten China’s access to chipmaking equipment. According to South China Morning Post, lawmakers have proposed the Multilateral Alignment of Technology Controls in Hardware (MATCH Act), which, if enacted, would ban exports of key tools to China, including deep ultraviolet (DUV) immersion lithography systems and cryogenic etching equipment.

Read more

• [News] U.S. Proposes to Tighten China Chip Tool Exports; Targets DUV to Slow SMIC and Peers’ Advanced Node Push
• [News] China’s Domestic Chip Equipment Adoption Beats 2025 Target at 35%, Led by NAURA, AMEC

(Photo credit: Applied Materials)