A Teradyne representative stated on Monday that the company, Teradyne, a provider of semiconductor testing equipment, withdrew manufacturing worth around $1 billion from China last year due to supply chain problems caused by U.S. export controls.
The company subcontracted to Flextronics to manufacture its semiconductor test equipment, which was mostly manufactured at a factory in Suzhou.
In an attempt to prevent American technology from assisting China’s military, U.S. regulations published in October 2022 limited exports to semiconductor manufacturing facilities in Massachusetts, prompting Teradyne, a Massachusetts-based company, to relocate its production.
Laptops 1000As the U.S.-China tech war heats up and regulators impose trade restrictions on sensitive areas like chip manufacturing, many American businesses have been attempting to lessen their reliance on China in recent years.
Teradyne, which released its profits on Tuesday, alerted investors to the possible effects of the October regulations in its 2022 annual report. In October 2023, the company stated that the limits had an impact on both its manufacturing and development operations as well as its sales to certain Chinese enterprises.
Brian Amero, director of worldwide compliance and ethics at Teradyne, spoke about the departure from China during a virtual export conference on Friday.
Amero stated at the annual export show of the Massachusetts Export Centre, “We had to get an emergency authorization to continue that activity because we did manufacturing in China.” “We decided that was too risky, so we moved manufacturing out of China—at no insignificant expense.”
Amero said that supply chain interruptions resulted from certain vendors refusing to ship to the business even after being given permission. According to the corporation, it ultimately obtained licenses to lessen the effects of the requirements, and when the United States revised the regulations in October 2023, it made an exception for testing apparatus used after a wafer was manufactured.
Laptops 1000Amero stated, “It’s still a front-burner issue,” at a conference session called “The China Balancing Act: Complying with Export Controls While Maintaining Your Sanity.”
He said Teradyne had been “significantly impacted by the rules,” even though the company had not been a “direct target” of them. And market share is where we’re witnessing that.”
Amero did not offer any figures. However, compared to 16% for the same quarter last year, China accounted for 12% of revenues for the three months that ended on October 1.
