China Routes Chip Tool Imports Through Southeast Asia

China has sharply increased imports of semiconductor manufacturing equipment from Southeast Asian nations, a shift that reflects efforts to route advanced chip tools through third-party markets as U.S. and allied export controls tighten. The trend points to a realignment of supply chains where countries such as Singapore, Malaysia, and others in the region serve as transshipment or intermediary nodes for equipment that would otherwise face direct restrictions into China. The mechanism is straightforward: as the U.S., Netherlands, and Japan coordinate controls on leading-edge chip tools, procurement through Southeast Asian intermediaries can obscure origin or exploit enforcement gaps in multilateral regimes. This raises compliance exposure for equipment makers headquartered in controlled jurisdictions and pressures allied governments to extend due-diligence requirements further down their export licensing chains. Washington and its partners will likely respond with stricter end-user verification and expanded red-flag guidance targeting Southeast Asian re-export routes, making the channel progressively riskier for participants on both sides.