It is reported that China is to mandate chipmakers to use at least 50% of domestically made equipment for adding new capacity, as Beijing looks to keep up the push in building a self-sufficient semiconductor supply chain.
The sources noted however that the rule is not one that will be publicly documented. But should chipmakers seek state approval to build or expand their plants, they are said to have been told to show proof in their procurement tenders that at least half their equipment are Chinese-made.
The push here is quite a significant one by Beijing, who seem to be happy to double down and hunker down by stripping itself of any reliance on foreign technology. That especially after the US has continued to tighten technology export restrictions since 2023, having banned sales of advanced AI chips and semiconductor equipment to China.
But with this new mandate, it even sees China look to alienate supply of foreign equipment from the likes of Japan, South Korea, and Europe in favour of domestic suppliers.
That being said, the sources said that local authorities will grant flexibility depending on supply constraints. In particular, areas where domestically developed equipment is not yet fully available. However, applications which typically fail to meet the 50% threshold should be rejected.
One of the sources mentioned that:
“Authorities prefer if it is much higher than 50%. Eventually they are aiming for the plants to use 100% domestic equipment.”
As Beijing continues down this path, the big winner seems to be China’s largest chip equipment group, Naura Technology
