With the intensifying regulations on the advanced semiconductor industry expected under the Trump administration, analyses suggest that China's self-sufficiency rate for semiconductor equipment may reach 50% this year as it focuses on fostering the semiconductor equipment industry. As the supply volumes from global corporations supplying advanced semiconductor equipment, such as the Netherlands' ASML and the United States' Applied Materials, Lam Research, and Japan's Tokyo Electron, are anticipated to decrease significantly due to U.S. sanctions, it is analyzed that China is working to increase its self-sufficiency rate.
According to local media in China on the 17th, the self-sufficiency rate of China's semiconductor equipment is reported to be around 20% as of last year. As U.S. semiconductor regulations are expected to intensify this year, it is suggested that the domestic self-sufficiency rate for legacy semiconductor equipment, which is approaching 90%, and the self-sufficiency rate could reach up to 50% due to investment in research and development.
China is rapidly preparing for the intensifying U.S. semiconductor regulations. As it is expected that the supply of processing equipment will face difficulties due to the regulations on advanced semiconductor equipment, domestic semiconductor equipment corporations are expanding their supply volumes. Global semiconductor equipment corporations like ASML and Applied Materials have also projected that their revenue share from the Chinese market could decrease by about 10 percentage points this year due to U.S. semiconductor industry regulations. Their revenue share from the Chinese market was nearly 50% last year.
Chinese semiconductor equipment corporations are rapidly growing, buoyed by a rapidly expanding domestic market and government support funds for industrial development. To support the semiconductor industry, the Chinese government has so far established a total capital of 686.9 billion won (approximately 136.5 trillion won), including 138.7 billion yuan for phase 1, 204.2 billion yuan for phase 2, and 344 billion yuan for phase 3. The capital raised in phase 3 is reportedly focused on expanding semiconductor equipment and materials.
NauRa Technologies, China’s largest semiconductor equipment corporation, is expected to see its provisional net profit reach between 5.17 billion yuan (approximately 1.027 billion won) and 5.95 billion yuan (approximately 1.1828 billion won), representing a maximum increase of 53% from the previous year. China’s ACM Research is also expected to report a provisional revenue of between 5.6 billion yuan (approximately 1.1132 billion won) and 5.88 billion yuan (approximately 1.1689 billion won), marking an increase of up to 51% compared to the same period last year. AMEC, which has focused on advanced process development and supplied equipment to TSMC, projected its revenue for last year to be at 9.065 billion yuan (approximately 1.8021 trillion won), an increase of 45% from the same period last year.
However, local IT media such as China Tech News has expressed cautious opinions regarding self-sufficiency rates. While the self-sufficiency rate for legacy semiconductors reaches 75-90%, it was noted that dependency on global equipment corporations remains high in the advanced process sector. Specifically, it was pointed out that while most processing equipment over 28 NANO (nanometers, 1 billionth of a meter) can currently be produced by Chinese semiconductor equipment corporations, the self-sufficiency rate for foundry equipment and advanced memory semiconductor production equipment below 14 NANO is less than 30%.
A representative from the semiconductor equipment industry noted, "The very fact that the self-sufficiency rate in the semiconductor equipment field has increased so rapidly is encouraging, and progress is also remarkable in the advanced process sector, which is evaluated as relatively weak." However, they added, "Nevertheless, analyses are prevalent that it will be difficult for China to completely achieve domestic production in the areas of photolithography, which draws circuit patterns for semiconductors, and etching, which removes unnecessary parts, where global equipment corporations hold a monopolistic position."