In a clear demonstration of the agility of global supply chains, Chinese semiconductor manufacturers are increasingly sourcing critical chipmaking equipment through Southeast Asia, effectively bypassing direct imports from the United States. New customs data reveals that imports from Singapore and Malaysia reached record highs in 2025, highlighting the complex reality of enforcing technology export controls.
This shift in procurement strategies comes as the US government, spanning both the Biden and Trump administrations, has steadily tightened restrictions on the export of advanced semiconductor manufacturing equipment to China. The goal has been to constrain Beijing’s ability to produce cutting-edge chips for AI and military applications. However, the data suggests that Chinese firms are finding alternative pathways to acquire the necessary tools, as detailed in a recent Nikkei Asia investigation.
The Surge in Southeast Asian Imports
According to an analysis of Chinese customs data, imports of semiconductor manufacturing machines from Singapore reached $5.7 billion in 2025, representing a year-over-year increase of more than 17 percent. Even more striking, imports from Malaysia more than doubled compared to the previous year, hitting $3.4 billion.
In stark contrast, direct imports of chip tools from the United States plummeted by over 34 percent to approximately $2 billion, marking the lowest level since 2017. This divergence clearly illustrates the impact of US export controls on direct bilateral trade, while simultaneously exposing the limitations of unilateral restrictions in a deeply interconnected global industry.
While the Netherlands (home to ASML) and Japan (home to Tokyo Electron) remain China’s primary foreign sources for critical chipmaking machinery, the rapid growth of Southeast Asian channels is significant. Many global semiconductor equipment manufacturers maintain substantial operations, including final assembly and testing facilities, in countries like Singapore and Malaysia. By sourcing tools from these regional hubs, Chinese buyers can navigate the complex web of trade restrictions more effectively.
The Disconnect Between Revenue and Customs Data
The customs data also reveals a fascinating discrepancy when compared to the financial reports of major US equipment vendors. The three top American chip tool makers generated almost $19 billion in combined revenue from China in fiscal 2025. This figure significantly exceeds the $2 billion implied by Chinese customs data based on the origin of shipments.
This gap underscores the effectiveness of the production diversification strategies employed by American vendors. By fulfilling Chinese orders from facilities located outside the United States, these companies can maintain their lucrative market share in China while complying with the letter of US export regulations.
For international players, China remains an indispensable market. ASML reported that China accounted for 29.1 percent of its revenue in 2025, while Tokyo Electron saw more than 40 percent of its fiscal 2025 revenue originate from Chinese customers.
The Rise of Domestic Alternatives
While Chinese chipmakers continue to aggressively procure foreign equipment through alternative channels, the ultimate goal remains technological self-sufficiency. The pressure exerted by US export controls has catalyzed a once-in-a-generation boom for China’s domestic chipmaking equipment sector.
Leading Chinese suppliers, including Naura, Advanced Micro-Fabrication Equipment Inc. China (AMEC), ACM Research, and Piotech, all reported record revenue and profits for 2025. As Chinese logic and memory chipmakers—such as SMIC, Hua Hong, CXMT, and YMTC—execute aggressive capacity expansion plans, they are increasingly integrating domestic tools into their production lines.
An executive from a Taiwanese chipmaking tool company noted, “For every foreign chipmaking tool, material and component you can think of, you could find Chinese versions.” While acknowledging that domestic alternatives may not yet match the durability or performance of top-tier foreign equipment, the executive emphasized China’s unwavering commitment to increasing the use of homegrown suppliers.
US Policymakers Respond with the MATCH Act
The evolving dynamics of the semiconductor supply chain have not gone unnoticed in Washington. Recognizing that unilateral controls are increasingly porous, US policymakers are seeking to close loopholes and foster tighter international coordination.
In April 2026, bipartisan lawmakers introduced the MATCH Act. This legislation calls on “multilateral allies” to coordinate more closely to align and tighten export restrictions across key segments of the chipmaking equipment industry. The act aims to target critical “chokepoint” components and machinery, specifically focusing on shipments to leading Chinese memory and logic chipmakers. The introduction of the MATCH Act signals a recognition that the US-China tech war is entering a new phase. As China successfully reroutes its supply chains and accelerates the development of domestic alternatives, a trend we noted when China banned foreign AI chips from state-funded data centers, the United States is attempting to build a more comprehensive, multilateral containment strategy. The success of this approach will depend heavily on the willingness of allied nations to align their economic interests with Washington’s strategic objectives.