Taiwan Ministry of Finance data: chipmaking machine exports to the US rose 42.6% YoY to a new high of $71.3M in March 2023 while exports to China fell 33.7% YoY
Yoshihiro Sato / Bloomberg :
Context & Ripple Effects
This extends a two-month slide in Taiwan's chip trade with China: after February's 31.3% drop in chip exports to China and Hong Kong — the worst since 2009 followed January's 27.1% fall, the March data shows the divergence reaching the equipment layer, with Taiwanese chipmaking-machine sales to the US hitting a record while China-bound machine exports shrink by a third. It lands against a backdrop of already-cooling momentum — full-year 2022 IC export growth had slowed to 18.4% after two years above 20%.
First-order effects
- US-based buyers of Taiwanese production tooling capture a growing share at a new high ($71.3M in March, +42.6% YoY) as Chinese customers cut orders 33.7% YoY, shifting Taiwan's export mix decisively toward the US within a single quarter.
Second-order effects
- China's tooling demand does not disappear — it reroutes: later trade data shows imports pivoting to Japanese and Dutch suppliers for legacy gear and to Singapore and Malaysia transshipment channels once direct US imports fall, meaning the Taiwan-US shift is one leg of a broader redirection rather than lost volume.
Third-order effects
- The pattern points toward a structurally split tooling market: US-led controls fragment demand into a controlled bloc and a workaround economy — including undocumented rules pushing Chinese chipmakers toward 50% domestically made equipment and retrofitting of older ASML DUV machines — that erodes the controls' intended ceiling on China's advanced-chip capability.
The trend: Chip supply chains are bifurcating along the US-China control line, with trade volumes diverting through third countries and domestic substitution rather than shrinking outright.