China’s Local Push: Semiconductors to Breathe Domestic Air

According to Reuters, the Chinese government has mandated that domestic semiconductor manufacturers use at least 50% locally-produced equipment in new or expanded factories. While there is no formal decree, local authorities have informed manufacturers about the need to provide tender proposals confirming that at least half of the equipment purchased comes from local companies. It is essential to note that this requirement covers all factory equipment, not just what directly contributes to chip production. This includes systems for air purification and water supply.

China continues to witness a burgeoning development of local manufacturers producing sophisticated semiconductor equipment. For instance, Naura is testing etching equipment capable of processing components using a 7 nm process technology. Their portfolio also includes machinery to etch microchips with more than 300 layers and a wide array of other devices aimed at the Chinese market, gradually replacing imported equipment from American or Japanese suppliers.

Recent developments show that Naura’s advancements in equipment technology play a critical role in supporting China’s semiconductor industry amid global supply chain challenges. The push towards self-reliance aligns with China’s long-term goal to become a leading force in the semiconductor market, reducing dependency on external sources and mitigating risks from international trade dynamics.

With these regulatory changes, global semiconductor manufacturers could face increased competition as China strengthens its position with domestically produced technologies. Future trends suggest a growing emphasis on cutting-edge innovation and local talent development to support this strategic endeavor.