Caixin
Oct 21, 2022 03:45 AM
TECH

China Chip Gear Ban May Whack $2.5 Billion Off Lam’s Revenue

What’s new: U.S. chipmaking equipment supplier Lam Research expects to lose $2 billion to $2.5 billion of revenue next year as a result of Washington’s restrictions on exports of high-end technology to China, the company said Wednesday.

The world’s fourth-largest semiconductor equipment maker took necessary steps to ensure full compliance with the rules and ceased shipments and support as required, Tim Archer, Lam’s president and CEO, said on an earnings call.

Lam Research gets 30% of its business from China. The company now expects its Chinese revenue will be “significantly lower” next year, Chief Financial Officer Doug Bettinger said on the earnings call. When asked whether customers in other regions are expected to make up for the loss in China, the CFO said it’s “unlikely.”

Bettinger said the company decided to slow hiring and to fill only key positions.

The background: Earlier this month, the U.S. Commerce Department unveiled sweeping regulations that limit the sale of semiconductors and chipmaking equipment to China. U.S. companies must stop supplying Chinese chipmakers with equipment that can produce relatively advanced chips unless they first obtain a license.

The U.S. also ordered Americans participating in advanced chip production in China to apply for permits to do so. Since mid-October, American companies have withdrawn employees from their Chinese clients including top memory maker Yangtze Memory Technologies Co. Ltd. and Semiconductor Manufacturing International Corp.

Lam is a key supplier of chipmaking equipment to Yangtze Memory, whose 128-layer flash memory chips fall under the scope of the U.S. export ban.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)

Download our app to receive breaking news alerts and read the news on the go.

Get our weekly free Must-Read newsletter.

Share this article
Open WeChat and scan the QR code
NEWSLETTERS
Get our CX Daily, weekly Must-Read and China Green Bulletin newsletters delivered free to your inbox, bringing you China's top headlines.

We ‘ve added you to our subscriber list.

Manage subscription
PODCAST
Caixin Biz Roundup: China Bumps Up Support for Property Sector
00:00
00:00/00:00