China mandates 50% domestic equipment rule for chipmakers

Requirement eased in advanced production if local gear not yet fully available: Sources

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Advancements by Naura Technology, China's largest chip equipment group, are part of a push by Beijing to build a self-sufficient semiconductor supply chain. Analysts say China has reached roughly 50 per cent self-sufficiency in photoresist-removal and cleaning equipment, led by Naura. PHOTO: REUTERS

(PHOTO: REUTERS)

China is requiring chipmakers to use at least 50 per cent domestically made equipment for adding new capacity, three people familiar with the matter said, as Beijing pushes to build a self-sufficient semiconductor supply chain.

The rule is not publicly documented, but chipmakers seeking state approval to build or expand their plants have been told by the authorities in recent months that they must prove through procurement tenders that at least half their equipment is Chinese-made, the sources told Reuters.

The mandate is one of the most significant measures Beijing has introduced to wean itself off reliance on foreign technology, a push that gathered pace after the United States tightened technology export restrictions in 2023, banning sales of advanced artificial intelligence chips and semiconductor equipment to China.