News via Reuters is suggesting that the Chinese government has started to mandate that Chinese semiconductor manufacturers have to use at least 50 percent locally produced chipmaking equipment in new or expanded fabs. Reuters claim that there's no official regulation to the matter, but Chinese chipmakers have been informed by local authorities that they need to provide procurement tenders that prove that at least half of the equipment they're buying are from local companies. This has apparently been the case when several different Chinese companies have applied to build new fabs or when they've applied for extensions of current fabs.

It's important to remember that a lot of the equipment in these fabs aren't related to the actual production of semiconductors, even if there are Chinese companies that are capable of producing some of the equipment needed for the semiconductor production side of things. However, it's also important to remember that China wants to be more self-reliant when it comes to semiconductor manufacturing and the end goal is for local companies to use only locally produced equipment in their fabs. Considering that the world's leading semiconductor manufacturers all rely on Dutch ASML for cutting edge photolithography machines, it's unlikely that this shift will happen any time soon. With the current technology export restrictions, this is also a step for China to show the world that they can do this on their own, without imported machines or components. According to Reuters, orders for 421 locally produced lithography machines and parts were placed in 2025. At the same time, China has set aside around US$49 billion to help boost the local semiconductor sector.
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