Chinese enterprises are coping with the United States’ semiconductor supply chain reshaping and equipment export restrictions by buying up used equipment.

“It is U.S. restrictions on Huawei that caused the ongoing global chip shortage,” Huawei rotating chairman Eric Xu remarked at Huawei Global Analyst Summit 2021 in Shenzhen on April 12. According to him, the restrictions caused semiconductor companies to hoard chips and things are getting even worse as Chinese foundry SMIC cannot produce chips due to the restrictions.

SMIC recently extended its DUV lithography equipment supply contract with Dutch company ASML for one year by taking advantage of the fact that this type of equipment is yet to be regulated. In addition, SMIC is importing used semiconductor manufacturing equipment in quantity from Japan. Wingtech, which took over Nexperia in the Netherlands in 2019, recently built a power semiconductor manufacturing plant in Shanghai.

Chinese companies are working on their own chips as well in order to reduce their dependence on U.S. fabless companies. For example, Xiaomi recently unveiled an image processing chip of its own development and smartphone manufacturer Oppo initiated chip R&D in 2019 and is about to come up with its own chip.

In the meantime, Huawei president Karl Song remarked on April 13 that the U.S. restrictions are adversely affecting companies in multiple countries as well as China. “We hope to reshape the global supply chain in cooperation with the semiconductor industry leaders including South Korea, Japan and Europe and we hope consumers can be protected from a rise in chip price,” he said.