1. Background: US Tightens Semiconductor Exports Targeting AI Chips
On July 26, 2026, the US Department of Commerce's Bureau of Industry and Security (BIS) formally issued an interim final rule, further escalating semiconductor export controls on China. The new rules primarily target advanced chips used in AI training and related manufacturing equipment, expanding the scope from the previous 14nm and below to all logic chips with 16nm and below processes, while adding controls on high-bandwidth memory (HBM). This is the most comprehensive revision since the first round of controls in October 2022, aimed at curbing China's potential breakthroughs in cutting-edge military and AI fields.
The new rules also adjust the Foreign Direct Product Rule (FDPR), bringing overseas manufacturing equipment using US software or technology under control. For example, semiconductor equipment manufacturers located in Singapore, Malaysia, the Netherlands, etc., must obtain US licenses before exporting manufacturing equipment for controlled chip production to China. This move directly impacts the global semiconductor trade network, especially the supply chain layout in the Asia-Pacific region.
2. Industry Reactions: Supply Chain Firms Urgently Assess Compliance Risks
After the announcement, share prices of major global semiconductor equipment and chip manufacturers diverged. US equipment makers like Applied Materials and Lam Research saw slight declines amid concerns over reduced orders from Chinese customers; while non-US equipment makers such as Tokyo Electron and ASML faced more uncertainty due to the FDPR expansion, leading to an overall weakening of the chip sector in European stock markets. South Korean memory giant SK Hynix said its HBM product exports to China would be affected, and the company is evaluating whether to adjust capacity allocation.
The Semiconductor Industry Association (SIA) stated in a statement that while it understands national security considerations, unilateral expansion of controls may disrupt the global semiconductor trade ecosystem and cause US companies to lose some market share. China's Ministry of Commerce responded that it will take necessary measures to protect the legitimate rights and interests of domestic enterprises and accelerate the independent chip R&D process.
3. Trade Data Analysis: Global Chip Trade Structure Changes
According to the latest data from the World Semiconductor Trade Statistics (WSTS), global semiconductor market sales in the first half of 2026 reached $289 billion, up 12.3% year-on-year, with China remaining the largest consumer, accounting for about 35%. However, as US controls intensify, China's import channels are forced to shift toward mature process chips and second-hand equipment, causing significant changes in global chip trade flows.
Analysts point out that the new rules may accelerate the trend of "friend-shoring" between the US and its allies. Countries such as Malaysia, Vietnam, and India are attempting to take over the packaging and testing capacity transferred from China, but face infrastructure and talent bottlenecks in the short term. Meanwhile, China's domestic semiconductor equipment import substitution rate has increased from 12% in 2022 to 23% in 2026, with companies like Shanghai Microelectronics Equipment (SMEE) and AMEC making partial breakthroughs in etching and lithography.
4. Asia-Pacific Supply Chain: Regional Cooperation and Competition Intensify
As the core hub of global semiconductor manufacturing and trade, the Asia-Pacific region is directly affected by the new rules. Companies in Japan, South Korea, and Taiwan are deeply tied to the US in equipment, materials, and chip design, and have to adjust their business strategies for China. Japanese companies such as Tokyo Electron and Shin-Etsu Chemical have begun to restrict exports of certain polishing materials to China.
On the other hand, the new rules also prompt China to accelerate chip cooperation with Russia and the Middle East. According to Reuters, recently Chinese chip design companies have begun to purchase EDA tools and IP cores through third-party channels, but face compliance risks. Southeast Asian countries are seeking a balance between China and the US: Singapore's Agency for Science, Technology and Research (A*STAR) launched the "Semiconductor Trade Resilience Plan" to establish a neutral certification system to provide transaction channels for customers meeting export control requirements.
5. Investment Strategy Outlook: Institutional Views and Future Trends
Many investment institutions believe that semiconductor trade controls will reshape the global supply-demand landscape in the medium to long term. Goldman Sachs issued a report stating that China's AI chip self-sufficiency process will be delayed by 1-2 years due to HBM restrictions, but the oversupply issue of mature process chips may worsen. Morgan Stanley recommends investors to moderately allocate Japanese equipment makers and Korean memory giants, believing they will benefit from US CHIPS Act subsidies and emerging market demand.
From a trade data perspective, global semiconductor trade value is expected to maintain growth in the second half of 2026, but regional divergence will intensify. US semiconductor export control policies may become the norm, and companies need to establish diversified supply chains and compliance management systems. For Chinese investors, they need to focus on domestic substitution logic in equipment, materials, EDA tools, etc., while being alert to short-term volatility caused by policy changes.
In conclusion, the new round of US export controls on July 26, 2026 marks a new stage in global semiconductor trade. Asia-Pacific countries and regions need to reassess their industrial positioning and cooperation frameworks to adapt to a more fragmented but opportunity-laden trade environment.
