China is moving to deepen domestic control over semiconductor production. A Reuters report on December 30, 2025 said Beijing now requires chipmakers to use at least 50% domestically made equipment when adding new capacity. The rule is aimed at new builds and expansions across foundries and memory lines. The measure is not public. Officials are using plant approvals and procurement reviews to enforce it.
According to the report, project sponsors must show tender documents that meet the threshold. Applications below 50% face rejection, though officials allow case by case flexibility. Leeway is greater for advanced lines where local tools remain limited. The rule sits within China’s broader drive to raise self reliance in chips. It follows years of tighter foreign export controls.
Procurement tests and flexibility
The mandate changes equipment buying for China based fab projects. Local toolmakers, including Naura and AMEC, stand to capture more orders as fabs qualify domestic etch, deposition and clean tools. Foreign suppliers from the United States, Japan and Europe may still sell into gaps, but share could shrink over time. Enforcement through tenders gives officials a direct lever over build schedules. It also forces faster local qualification cycles.
Sources described a clear policy intent. “Authorities prefer if it is much higher than 50%.” In practice, that could push turnkey packages to bundle more domestic subsystems. It could also nudge integrators to redesign lines around local spares and service. Over time, that reduces dependency risks that have held back tool uptime in China. Short term, project risk may rise as teams validate alternative equipment.
Fab design teams will need to map each process step against local options. Cleaning, photoresist strip and some etch tools have credible domestic supply. Lithography, advanced metrology and certain deposition steps still rely on foreign leaders. Where gaps persist, approvals may hinge on documented searches for local substitutes. That adds time and paperwork to plant expansions. It also increases the value of pilot lines that prove yield on local stacks.
The shift intersects with regional incentives and grid, water and gas connections for new fabs. Provincial authorities often align subsidies with national priorities, so procurement ratios may affect support terms. Contractors may face new documentation standards in bidding. That includes local content tracking across OEMs and sub suppliers. Audit trails will matter.
Longer term goals appear ambitious. “Eventually they are aiming for the plants to use 100% domestic equipment,” Per the Reuters report. If pursued, that raises stakes for foreign service teams operating in China.