China’s chipmaking supply chain runs through Southeast Asia - East Asia Forum

US semiconductor export controls on China are reshaping the country’s access to chipmaking equipment, fundamentally altering the geographic structure of its supply chain. In 2025, direct US chip equip... Read original →

U.S. export controls are triggering a structural rerouting—not evasion—of China’s semiconductor supply chain. Technologically, sub-3nm nodes are effectively frozen without EUV access, yet mature-node tools flow via Singapore and Malaysia under compliance frameworks, sustaining 28nm+ production in a ‘de-Americanized but not de-regulated’ ecosystem. Compliance overhead has inflated equipment lead times by over 40%, with localized spare parts and service emerging as critical chokepoints. Strategically, U.S. vendors like Applied Materials maintain aftermarket revenue through Southeast Asian subsidiaries, while Chinese rivals such as Naura and AMEC gain market share at razor-thin margins below 15%. Over the next 12–24 months, Southeast Asia will solidify as a sanctioned-compliant buffer zone—but its reliance on U.S.-licensed tech caps its strategic autonomy. The long tail: China is being locked into a high-cost, geopolitically ‘safe’ yet technologically secondary semiconductor ecosystem.