China is now instructing its companies to use nearly 50% of the local chip tools in new fabs. This is a mandatory step that every Chinese client has to take to add new capacity in their fabrication plants, instead of looking towards US technology.
U.S. is playing new moves by approving the top tech players like Nvidia and Samsung to ship their chips and relevant tools in China, for its own “growth” benefits!
And now China is up to counterattack these moves with its own important rules. It is now forcing companies and chipmakers to mandatorily use 50% of local chip tools in China-based fabrications, aiming at a self-made semiconductor supply chain.
Under this rule, chipmakers have to obtain approval before developing or expanding their plants using foreign products. They must also prove via procurement tenders that half of the equipment belongs to China and not the US.
It’s not the first time that China has made such instructions for its firms. The country has been doing so since 2023, when the US toughened chip controls on China.
For now, the US is loosening these tight controls by allowing certain firms to chip their products in China, helping both sides’ people in terms of AI and tech growth.
But China seems to have different plans. Inputs suggest Beijing is using the 50% rule even in those areas where foreign chip tools from the US, Japan, South Korea, and Europe are available without any interruptions.
One of the sources said:
“Authorities prefer that it is much higher than 50%. Eventually, they are aiming for the plants to use 100% domestic equipment.”
China is seeing this step as a whole-nation approach in building a self-reliant chipset supply chain. Only time will reveal how far this move help the country against the US.
(Image Credits: Huawei)
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