Type to search

Teradyne Pulled $1bn of Chip Testing Equipment Out of China

US firm that makes chip testing equipment pulled gear worth $1 billion out of China last year after deciding it was ‘too risky’ to stay amid supply chain and other issues

Flags of China and U.S. are displayed on a printed circuit board with semiconductor chips, in this illustration
Flags of China and the US are displayed on a printed circuit board with computer chips, in this Reuters file image.


Teradyne, a US firm that designs and makes testing equipment for computer chips, revealed this week it had been hit hard by export controls imposed by the Biden Administration on semiconductors sold to China.

Manufacturing equipment worth about $1 billion had been pulled out of China last year, a Teradyne spokesperson said on Monday, after US export regulations led to supply chain disruptions.

A factory in Suzhou was the company’s main manufacturing site for its semiconductor test equipment, which it subcontracted to Flextronics.

Massachusetts-based Teradyne moved its production out after US rules issued in October 2022 restricted exports to semiconductor manufacturing facilities there as part of an effort to keep US technology from helping China’s military.


ALSO SEE: Firm Smuggled 53,000 Banned US Chips to China – BusinessKorea


Many US companies have been trying to reduce their reliance on China in recent years as the US-China tech battle ramps up and regulators limit trade in sensitive technologies like chip making.

Teradyne, which reports its earnings on Tuesday, warned investors in its 2022 annual report about the potential impact of the October regulations, and in October 2023 said the restrictions hit both Teradyne’s sales to certain companies in China and its manufacturing and development operations.

On Friday, Teradyne’s director of global compliance and ethics, Brian Amero, told a virtual export conference about the move out of China.


‘Too risky to stay’

“We did manufacturing in China, so we had to get an emergency authorization to continue that activity,” Amero said at the Massachusetts Export Center’s annual export expo. “We decided that was too risky so we moved manufacturing out of China — at no insignificant expense.”

Amero said some suppliers would not ship to the company, despite its authorization, leading to supply chain disruptions. It eventually got licences to mitigate the impact of the regulations, the company reported, and when the US updated the rules in October 2023, it carved out an exception for testing equipment used after a wafer is created.

“It’s still a front-burner issue,” Amero said during a conference session titled, “The China Balancing Act: Complying with Export Controls While Maintaining Your Sanity.”

While Teradyne had not been a “direct target” of the rules, he said, the company had been “significantly impacted by them. And we’re seeing that show up in market share.”

Amero did not provide numbers. But for the three months that ended October 1, China accounted for 12% of revenues, versus 16% for that quarter a year earlier.


  • Reuters with additional editing by Jim Pollard




Canon Says New ‘Stamp’ Machine Will Slash Chipmaking Costs – FT


US Plans New Rules for Cloud Firms to Cut Off China AI Access


Japan Pledges $13bn to Boost Chip Sector Leadership Bid


Slower Nvidia Chip Out in Q2 But China Firms ‘Don’t Want It’


Nvidia to Stop Some AI Chip Exports to China Immediately


China’s Military, AI Bodies Still Buying Nvidia Chips Despite US Ban


China Firms Rush to Poach Nvidia Clients With AI Chip Offerings


Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.


AF China Bond