Two Chinese chip part manufacturers have predicted their profits will double following US restrictions on the export of semiconductor equipment to China.

Chinese manufacturers are now relying on domestically sourced parts – which has led to a massive boost in revenue for domestic tech companies, according to the companies.

Peer Naura Technology Group, China-based semiconductor equipment maker, reported, last week, a 121% to 156% increase in its profits, totalling around $270m in the first half of the year. 

Advanced Micro-Fabrication Equipment, another China-based chip part maker, also claimed its profits likely grew between 110% and 120% in the first half of 2023. 

The US Commerce Department issued new rules last year which clamped down on the export of certain advanced chips (including those with military or AI applications) to Chinese companies. 

Chinese chipmakers have been ramping up research into alternatives for the once-essential US-imported tech.

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Last year, China consumed around 40% of all chips made globally, while being only 12% self-sufficient, according to research firm GlobalData.

The Chinese government has been pushing money and focus into boosting its domestic semiconductor supply chain in order to overcome the US curbs – and so far, it seems like it might be working. 

China’s road to self-sufficiency

Last week, it was reported that Huawei, one of the largest Chinese tech giants, is looking to return to the 5G smartphone industry by the end of the year, marking another sign that China is slowly overcoming US restrictions. 

According to Reuters, Huawei will soon be able to secure its own 5G chips domestically without the need for equipment from the US or its allies.

The news comes after Huawei’s business plummeted in 2020 when US restrictions began starving the company of essential semiconductor equipment. 

China has remained currently the leader for most AI research papers published, according to a Nikkei Asia study. Companies like Huawei Technologies, Alibaba Group Holding and Tencent Holdings are in the top ten companies producing AI research, the study reported.

The Semiconductor Industry Association and Boston Consulting Group predicted the semiconductor industry will double in size to more than $1trn by 2030, and China will account for approximately 60% of that growth.