What the decision entails
According to Reuters, Chinese authorities are informally requiring chipmakers, when building or expanding fabs, to use at least 50% locally made equipment. The rule has not been published officially, but companies applying for permits are being directly made aware of such a requirement through procurement tenders.
"The authorities prefer figures well above 50%. Ultimately, they want plants to use 100% domestic equipment"
— one Reuters source
Why this is happening
The decision to strengthen preferences for local suppliers came after the US tightened export restrictions in 2023. When Washington banned the supply of advanced chips and some of the equipment used to produce them, Beijing began urgently seeking a path to technological autonomy. This is not just an economic measure, but part of a broader geopolitical strategy.
Winners and losers
The biggest beneficiaries of this course are Chinese equipment manufacturers, notably Naura Technology Group and AMEC. According to the patent database AcclaimIP (Anaqua), Naura filed 779 patent applications in 2025 — a record and more than twice as many as in 2020–2021. This indicates rapid investment in developing domestic technologies.
At the same time, foreign suppliers — American, Japanese, South Korean, European — are gradually losing ground in the Chinese market, which has traditionally been the world's largest in terms of order volume.
Practical examples and indicators
Chinese firms are already showing progress in critical segments. For example, in etching — a key stage of chip production — China has reached about 50% self-sufficiency in equipment for removing and cleaning photoresist, which was previously largely dominated by Japanese companies. Naura is testing its tools on SMIC's 7 nm lines — these are not abstract experiments, but examples of practical import substitution.
"Previously local fabs like SMIC preferred American equipment and gave Chinese firms no chance. But that changed starting with the US export restrictions in 2023"
— a former Naura Technology employee
What this means for Ukraine
The direct consequences for Ukraine are twofold. On one hand, strengthening China's self-sufficiency increases competitive pressure on global component markets, which may affect prices and the availability of certain elements for civilian and defense technologies. For sectors that depend on global semiconductor supply chains, diversification of import sources and strategic stockpiles of key components are important.
On the other hand, global competitiveness in equipment manufacturing opens opportunities for international investment and technological partnerships — provided Ukraine and its partners can offer stable conditions for innovation and intellectual property protection. For the defense sector this means: secure supply channels, investment in local technologies, and strengthened cooperation with allies.
Brief conclusion
China's course toward localizing chip equipment is not a temporary trend but a strategic reordering that is creating new centers of power in the global semiconductor industry. For Ukraine it is a signal: time to work on its own strategy of technological resilience, look for partners, and prepare for a change in the rules of the game in the component market.
Now the move is up to our partners — will declarations of support turn into concrete contracts and mechanisms to protect critical supply chains?
