China is requiring chipmaking companies to use at least 50% locally made equipment for capacity expansion, Reuters reported Tuesday, citing three people familiar with the matter.
Relevant authorities have recently informed chipmakers that are seeking state approval to build or expand capacity that they must prove via procurement tenders that at least 50% of their equipment will be made in China, the unnamed sources told the news agency.
The requirement is resulting in Chinese manufacturers to choose domestic suppliers even in areas where foreign equipment from markets such as the US is available, according to the report.
Non-Chinese firms like Lam Research (LRCX) had predominantly supplied advanced etching tools in China, but those firms are now being partially replaced by Naura and smaller rival Advanced Micro-Fabrication Equipment, Reuters reported, citing unnamed sources.
Lam Research and the Chinese embassy in Washington didn't immediately respond to MT Newswires' request for comment.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)
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