China’s chip equipment industry cleared 35 percent domestic penetration in 2025, but the components inside those tools still hide the deepest foreign dependence, according to new industry data.
NDRC figures show the tool-level localization rate reached 35 percent last year against a 70 percent target for 2027. NAURA Technology Group, AMEC and ACM Research Shanghai made the global top 20 equipment vendors by revenue for the first time in 2025, jointly holding 45 to 50 percent of their categories at Chinese fabs.
At SMIC’s 28nm lines, NAURA’s oxidation and diffusion furnaces cover 60 percent of tooling, and thermal processing overall sits at 30 to 40 percent domestic penetration. Beijing’s requirement that fabs use 50 percent domestic equipment to win expansion approval has turned qualification into a prerequisite, backed by the ¥344B Big Fund III.
The gap to 70 percent sits lower down the stack. Precision vacuum valves, dominated by Switzerland’s VAT Group, remain under 10 percent domestic, and RF power supplies for etch and deposition chambers are still about 80 percent foreign. US export rules already cover many of these sub-components.
Industry analysts caution that vendor claims, including AMEC’s 4,000 installed etch chambers, come largely from the companies themselves or state-adjacent media, with little independent verification.
