Teradyne pulled $1 billion worth of production from China amid U.S. export controls

By Karen Freifeld

(Reuters) – Teradyne, a supplier of semiconductor testing equipment, withdrew about $1 billion worth of production from China last year, a Teradyne spokesman said on Monday, after U.S. export rules caused supply chain disruptions.

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

Massachusetts-based Teradyne shifted its production after U.S. rules in October 2022 restricted exports to semiconductor manufacturing facilities there as part of an effort to prevent U.S. technology from helping China’s military.

Many U.S. companies have sought to reduce their dependence on China in recent years as the technology battle between the U.S. and China intensifies and regulators restrict trade in sensitive technologies such as chip making.

Teradyne, which reports earnings on Tuesday, warned investors in its 2022 annual report about the potential impact of the October regulations, saying in October 2023 that the restrictions will affect Teradyne’s sales to certain companies in China as well as its manufacturing and development activities.

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

“We were manufacturing in China, so we had to get an emergency permit to continue that activity,” Amero said at the Massachusetts Export Center’s annual export fair. “We decided this was too risky, so we moved production out of China – at no significant cost.”

Amero said some suppliers would not ship to the company despite its approval, leading to supply chain disruptions. It was eventually licensed to…

Read Complete News ➤

Benefits of eating guava for Americans