U.S. chip tool makers eye Southeast Asia as China business shrinks

Lucy Chen, vice president of Isaiah Research, said based on her supply chain checks, American equipment suppliers have been laying off staff in China and shifting away from the country in waves, with a peak happening in December, when the U.S. export controls hit company revenues.

"These American equipment players have an existing manufacturing presence in Southeast Asia, but what's awkward now is the industry is having a cyclical downturn at the moment," Chen told Nikkei Asia.

"The pace of China's chip advancement will be slowed in the next three to five years because of the U.S.-Japan-Netherlands agreement, but the country will increase its investment in the equipment sector," she added. "For the longer term, China will nevertheless figure out ways to be self-reliant."