China Semiconductor Equipment Self-Reliance Surges Past 35 Percent
China semiconductor equipment self-reliance reaches 35%, surpassing MIIT target. Naura revenue +42%.
By CII (China Industry Intel) – Contributing Analyst | June 20, 2026
China’s semiconductor equipment self-reliance rate has reached 35% in the first quarter of 2026, surpassing the Ministry of Industry and Information Technology’s original target of 30% set for end-2025, according to data released by the China Semiconductor Industry Association (CSIA) on June 18. The achievement marks a significant milestone in Beijing’s campaign to reduce dependence on foreign chipmaking tools — and it is happening faster than most Western analysts predicted.
The Numbers Behind the Surge
The 35% self-reliance rate represents a dramatic acceleration from the 18% recorded in 2022 and the 25% measured at end-2024. The growth is driven by three domestic equipment makers that have emerged as credible alternatives to their Western and Japanese counterparts:
| Company | Specialty | Market Position | 2025 Revenue Growth |
|---|---|---|---|
| Naura Technology | Etching, deposition, oxidation | China’s #1 equipment maker | +42% |
| AMEC (Advanced Micro-Fabrication Equipment) | Plasma etching (5nm-capable) | Supplies TSMC and domestic fabs | +38% |
| ACM Research | Cleaning and CMP equipment | Global top 5 in wafer cleaning | +31% |
| Shanghai Micro Electronics (SMEE) | Lithography (90nm DUV) | China’s only lithography maker | +15% |
| Huahong Scientific | Ion implantation | Domestic market leader | +28% |
Naura Technology, China’s largest semiconductor equipment maker, reported 2025 revenue of 28.5 billion yuan ($3.9 billion), a 42% increase that made it one of the fastest-growing equipment companies globally. The company’s etching and deposition tools are now qualified at SMIC, Hua Hong, and YMTC, covering the majority of China’s domestic fab capacity.
Where China Is Gaining Ground
The self-reliance gains are concentrated in mature-node equipment — tools for 28nm and above — which accounts for roughly 70% of global chip demand by volume. In etching, deposition, cleaning, and CMP (chemical mechanical polishing), Chinese companies now command 30-40% of the domestic market, up from less than 15% three years ago.
The most notable progress is in etching. AMEC’s 5nm-capable plasma etch tools have been qualified not only at domestic fabs but also at TSMC — a fact that underscores both the quality of Chinese equipment and the complexity of the global supply chain. “AMEC’s tools are genuinely competitive at the leading edge,” said a semiconductor equipment analyst at Goldman Sachs. “They are not yet replacing Applied Materials or Lam Research, but they are a credible alternative.”
The biggest gap remains lithography. Shanghai Micro Electronics Equipment (SMEE) has delivered 90nm-class DUV tools, but the company is years away from anything comparable to ASML’s EUV machines or even its most advanced DUV systems. Lithography accounts for roughly 25% of semiconductor equipment spending, and China’s near-total dependence on ASML in this segment is the primary reason the self-reliance rate is 35% rather than 50%.
What This Means for the Global Equipment Market
UPSTREAM: Applied Materials, Lam Research, Tokyo Electron, and KLA — the “Big Four” equipment makers — have seen their China revenue decline as domestic substitution accelerates. Applied Materials’ China revenue fell 18% in its most recent fiscal quarter, and the company has lowered its guidance for China sales in 2026. The trend is clear: the Chinese equipment market is shrinking for foreign players.
DOWNSTREAM: Chinese fabs benefit from lower equipment costs and shorter delivery times. Domestic equipment is typically 20-30% cheaper than imported alternatives, and delivery lead times are 3-6 months shorter. For SMIC and Hua Hong, which are expanding mature-node capacity aggressively, domestic equipment is a competitive advantage.
BOTTLENECKS: The critical constraint is advanced process control (APC) and metrology — the tools that measure and verify chip quality during manufacturing. KLA dominates this segment globally, and Chinese alternatives are still in early development. Without domestic APC/metrology, Chinese fabs remain dependent on foreign tools for quality assurance, even if the production equipment itself is domestic.
What the Market Is Telling Us
BULL CASE: China achieves 50% equipment self-reliance by 2028, driven by continued government subsidies and the captive domestic market. Chinese equipment companies become global competitors, exporting to Southeast Asia and the Middle East. The Big Four lose 20-30% of their addressable market.
BEAR CASE: The self-reliance gains plateau at 40-45% as the remaining equipment gaps (lithography, metrology) prove too difficult to close. Chinese fabs continue to depend on foreign tools for the most critical process steps, and the equipment industry remains bifurcated.
BASE CASE: Self-reliance reaches 40-45% by 2028, with gains concentrated in mature nodes. Advanced-node equipment (7nm and below) remains dependent on foreign tools. Chinese equipment companies become significant players in the global market but do not displace the Big Four in their core segments.
WHAT TO WATCH: SMEE’s progress on DUV lithography (any move below 90nm would be a game-changer); Naura and AMEC quarterly earnings for revenue growth trajectory; U.S. and Japanese export control updates; and any new government subsidy programs for equipment R&D.
CII Analysis
China’s semiconductor equipment self-reliance reaching 35% is a significant achievement that validates Beijing’s industrial policy approach: sustained government subsidies, a captive domestic market, and aggressive technology development. The growth from 18% to 35% in three years is faster than most Western analysts expected, and the trajectory suggests 40-45% by 2028 is achievable. For the global equipment industry, the implications are clear: the Chinese market is shrinking for foreign players, and Chinese equipment companies are becoming competitors in their own right. The lithography gap remains the Achilles’ heel, but in every other equipment segment, China is closing the gap at an accelerating pace.
Related reading:
Sources
- SCMP — China’s semiconductor equipment self-reliance surges past targets
- S&P Global — How China’s Self-Sufficiency Drive Will Benefit Tech Leaders
- Reuters — China semiconductor equipment market data
- SEMI — Global semiconductor equipment market statistics
- Goldman Sachs — Semiconductor equipment industry analysis
