AMEC’s profit soars on strong local demand, tech board reshuffled

China’s etching equipment giant Advanced Micro-Fabrication Equipment (AMEC) has reported hefty growth in earnings and revenue in the first half of 2023 thanks to strong demand for local tools as a result of US tech export controls, the company’s founder and CEO Gerald Yin Zhiyao said on Friday.

Shanghai-based AMEC’s net profit rose 114 per cent year-on-year to 1 billion yuan (US$137 million) while revenue increased 28 per cent to 2.53 billion yuan, according to its earnings statement.

Yin said during a conference call with analysts on Friday that Chinese clients have accelerated adoption of AMEC’s etching equipment since last October after the US stepped up export controls aimed at cutting off China-based foundries from advanced US tools.

AMEC’s market share of China’s capacitively coupled plasma (CCP) etching equipment market is expected to reach 60 per cent in the near future from 24 per cent last October, Yin said. In the inductive coupled plasma (ICP) tool market, Yin said its share could rise to 75 per cent from almost zero after once-dominant Lam Research from the US saw its share drop sharply.

CCP and ICP are two main types of AMEC etching equipment, and combined they accounted for roughly 68 per cent of the firm’s total revenue in the first half.

Yin said the upbeat results were achieved as the Chinese mainland chip equipment market shrank 33 per cent year-on-year in the first half, deeper than a 23 per cent decline in the global chip tool market amid headwinds for consumer electronics.

A Silicon Valley-veteran and boss of China’s second-largest chip tool firm, Yin described the US October rules on chip exports to China as the “most lethal” since the onset of a US-China tech war that began in 2019. He has said the measures expose the US aim of setting China’s chip-making technologies at least five generations behind the global leading edge.

As China deepens its semiconductor self-sufficiency drive to include chip-making equipment and key components, Yin said that 80 per cent of restricted, imported parts at AMEC can be replaced domestically by the end of this year, with 100 per cent replacement following in the second half next year.

“We have a detailed road map for the domestic replacement of key parts,” said Yin on the call, adding that using domestically-produced parts for equipment could further open up the Chinese market for AMEC.

AMEC has also undergone a reshuffle of key personnel in the aftermath of the US October rules, which restricted US citizens and green card holders from providing services to China-based foundries. This is the first time that a Chinese chip firm has publicly revealed details of senior staff changes as a result of US sanctions.

AMEC has excluded Steve Sze-Yee Mak, Steven Tianxiao Lee and Du Zhiyou, three senior executives with US citizenship, from its key technology personnel board of six, according to its filing on Friday. All three will no longer “take part in the development of key technologies”, but still hold positions at AMEC, according to the filing.

AMCE also appointed six new partners – Cong Hai, Tao Heng, Jiang Yong, Chen Huanglian, Liu Zhiqiang and He Wei – to the key technology personnel board. Cong, a former Taiwan Semiconductor Manufacturing Co etching expert, and Tao were also appointed as deputy general managers, AMEC said in a separate stocking filing on Friday. South China Morning Post