As the United States continues to suppress Dutch and Japanese chip equipment companies from selling advanced chip equipment and materials to China, these chip companies are showing increasing dependence on the Chinese market. Meanwhile, purchases by TSMC and American companies have continued to decline, leaving these companies lamenting how they will survive if they cannot sell to China.

The performance report released by ASML, the leader in chip equipment, shows that 49% of its revenue comes from mainland China, and 28% from South Korea, while TSMC contributes only about 6% of its revenue, and American companies contribute just over 10%. This indicates that the Chinese market continues to be ASML's largest source of revenue, even as the US restricts ASML's sales of EUV lithography machines and 2000i DUV lithography machines capable of 7-nanometer production to China.

Subsequently, the performance reports released by US-based Lam Research, Applied Materials, and Japan's Tokyo Electron also showed that they derive more than 40% of their revenue from the Chinese market, and that revenue from this market is growing rapidly, highlighting its increasing importance to them.

Facing such a critical market, neither the Netherlands, Japan, nor even American companies would easily give it up. As a result, we see a paradoxical situation where, on the one hand, the US vocally opposes sales to China, but on the other hand, these companies are earning increasingly higher revenues from the Chinese market, suggesting that they still give the US a lot of face.

The current state of the global chip market is inseparable from the United States. As the world's largest chip exporter, the US has earned substantial revenues. During its heyday, companies like Intel, Qualcomm, and Texas Instruments reaped substantial profits, with net profit margins generally exceeding 20%. Chip companies were like money-printing machines.

As the world's largest manufacturing country, China actually earns only meager profits. Many of the products it produces require purchases from American chip companies. China's TV industry has long had a profit margin of around 1%, and the profit margin of the PC industry is as low as 2%. However, at that time, cooperation and mutual benefit were emphasized, and everyone got along peacefully.

However, for some unknown reason, the United States has brazenly targeted China in recent years, restricting the sale of high-end chips to China by American chip companies. It believed that by doing so, China would be unable to develop its high-tech industry. However, over the past few years, China's chip industry has demonstrated strong innovation and resilience, breaking through many technological barriers and foiling American schemes.

The US restricted several American companies from supplying 5G chips to a Chinese mobile phone manufacturer and also prevented TSMC from manufacturing 5G chips for this company. Several years later, domestic chip manufacturing technology has advanced to the point where it can produce quite advanced 5G chips, and the domestic industrial chain has also developed 5G radio frequency chips, driving this domestic mobile phone manufacturer to achieve a high degree of localization in mobile phone chips.

China has also formulated a plan to prioritize the development of mature process chips. Over the past few years, dozens of chip manufacturing plants have been built, and in 2023, China's chip production capacity accounted for 30% of global chip production capacity. China's mature process chips meet the chip requirements of Chinese manufacturing and have also begun to be exported overseas, even earning recognition from American home appliance manufacturers, pushing China's chip exports to new highs.

Under such circumstances, China's demand for chip equipment and materials has grown rapidly. As China's domestically produced chips continue to improve, the need for imported chips has decreased. Texas Instruments in the US has pointed out that inventory levels are high this year, and it will take until the third quarter of this year to clear them. The decline in US chip sales has affected the global supply chain, and TSMC, which mainly provides foundry services for American chips, has had to reduce expenditures and chip equipment purchases.

This situation is a zero-sum game, leading to the current state where global chip equipment and material companies are increasingly dependent on the Chinese market. This proves that China's chip industry is developing rapidly, and its purchases of overseas chips will further decrease. As China's chip industry accumulates technology and experience, its prospects for developing advanced chips in the future are becoming increasingly promising.