China tells chipmakers to use homegrown chipmaking tools for 50% of new capacity — decree designed to squeeze foreign suppliers out of supply chain
📊Executive Summary
China has implemented a new regulation requiring semiconductor manufacturers to use at least 50% domestically produced equipment for any new capacity additions. This rule, which is not formally published, aims to reduce reliance on foreign suppliers and promote local tool adoption. However, there are exceptions for advanced fabs due to insufficient local production capabilities, particularly in lithography systems. In 2025, Chinese state-linked chipmakers ordered 421 domestically produced lithography machines and components valued at approximately ¥850 million ($121.3 million). This move could significantly impact procurement strategies as companies may need to adjust their sourcing to comply with these new regulations....
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