China tells chipmakers to use homegrown chipmaking tools for 50% of new capacity — decree designed to squeeze foreign suppliers out of supply chain
China has quietly mandated that at least 50% of equipment used for new semiconductor capacity be domestically sourced. However, as China's industry cannot produce enough lithography tools, authorities tend to get flexible and allow foreign alternatives in.
China has quietly introduced a rule under which chipmakers must use at least 50% domestically produced equipment when adding new semiconductor manufacturing capacity, reports Reuters. The move could potentially reshape procurement decisions, accelerate local tool adoption, and squeeze foreign suppliers out of the Chinese market.
However, there are a number of catches with this requirement: firstly, authorities grant waivers for advanced fabs; secondly, Chinese industry cannot produce enough litho systems, if the numbers via Reuters are accurate.
Speaking of lithography tools, state-linked chipmakers placed 421 orders for domestically produced lithography machines and their components this year at combined value of about ¥850 million ($121.3 million), according to Reuters. While the number 421 looks substantial, it includes both new systems and spare parts, which does not give an idea how many new tools were actually ordered.
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