Chinese chip manufacturers are intensifying efforts to use domestically made production equipment, marking a critical phase as local toolmakers must prove they can deliver consistent and commercially viable machines for large-scale wafer fabrication.
- New Chinese fabs target up to 80% local equipment sourcing.
- Domestic toolmakers shift focus from technical proof to commercial consistency.
- China's wafer-fab equipment market projected to grow to over $60 billion by 2028.
What happened
Chinese semiconductor manufacturers are increasingly committing to sourcing their production equipment from domestic suppliers. This push is driven by explicit localization targets in new wafer fabrication plants, exemplified by a fab in Wuxi aiming for 80 percent locally made equipment. This shift comes as export controls from the US have curtailed access to American technology, accelerating the transition to Chinese-made machinery for chip production.
Leading domestic companies such as Britech, Naura Technology Group, AMEC, and Piotech are seeing strong revenue growth and are beginning to benchmark their production tools against established global leaders like Applied Materials and Tokyo Electron. Meanwhile, upstream material suppliers like Xian ESWIN are similarly increasing the share of local equipment used in wafer manufacturing, supporting the broader self-sufficiency goals of China’s semiconductor industry.
Why it matters
China’s drive for semiconductor equipment self-sufficiency is critical for reducing reliance on foreign suppliers amid ongoing geopolitical tensions and export restrictions. Successfully scaling up domestic chip tool production is essential not only for maintaining China’s chip manufacturing expansion but also for solidifying technological sovereignty in this strategic sector.
However, industry leaders emphasize that technical feasibility is no longer enough; the domestic equipment must prove reliable, consistent, and commercially scalable across multiple machines and fabs. Achieving this would enable Chinese toolmakers to compete internationally and gain top-tier foreign clients without domestic advantages, marking a significant milestone in the global semiconductor equipment market.
What to watch next
Monitoring how quickly Chinese domestic semiconductor equipment suppliers can scale from initial prototypes to large-scale, reliable production tools is key. The industry’s 'final exam' will be demonstrated when Chinese tools gain recognition and market share beyond domestic fabs and penetrate leading global chip manufacturing companies.
Market projections indicate rapid growth in wafer-fabrication equipment spending in China, reaching an expected $60.7 billion by 2028, especially driven by memory chip capacity expansions. How well local suppliers meet this growing demand under increasing performance and reliability expectations will shape the future competitiveness of China’s semiconductor industry.