Samsung Electronics and SK Hynix have been evaluating semiconductor manufacturing equipment from China’s Advanced Micro-Fabrication Equipment (AMEC) for potential use at their Chinese production facilities, Reuters reports, citing people familiar with the matter.
The evaluations, which began roughly two years ago, are part of contingency planning by the world’s two largest memory chipmakers as they seek to reduce operational risks should Washington impose further restrictions on Western semiconductor equipment entering China.
While neither company has approved broader deployment of AMEC’s tools, the trials represent an important milestone for China’s semiconductor equipment industry, offering one of its leading manufacturers a rare opportunity to gain validation from global memory chip leaders.
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The development also marks an unintended consequence of U.S. technology restrictions: measures designed to curb China’s semiconductor ambitions are simultaneously creating openings for Chinese equipment makers to displace Western suppliers inside foreign-owned fabrication plants operating in China.
However, Samsung told Reuters it has not tested AMEC equipment for use at its factory in China and has not considered doing so.
SK Hynix declined to comment.
Export Control Uncertainty Drives Contingency Planning
According to the sources, the chipmakers began assessing Chinese equipment as uncertainty grew over whether the United States would continue allowing them to import American chipmaking tools into China.
Washington designated Samsung’s and SK Hynix’s Chinese operations as Validated End Users (VEU) in 2023, allowing them to receive certain controlled U.S. semiconductor equipment without applying for individual export licenses. That arrangement changed in 2025 when the United States revoked the VEU designation before later granting both companies annual licenses covering equipment shipments into their Chinese facilities for 2026.
Although the licenses currently permit continued operations, executives remain concerned that future restrictions could become significantly broader. Rather than targeting only new equipment sales, future U.S. measures could also limit servicing, repairs, software upgrades or replacement parts for Western tools already installed inside Chinese fabs, the sources said.
As a result, Samsung and SK Hynix are evaluating Chinese suppliers primarily as a safeguard to maintain existing production lines if access to Western equipment becomes more restricted, rather than as a means of expanding manufacturing capacity in China.
China’s Growing Equipment Capabilities
The evaluations underscore the rapid progress made by Chinese semiconductor equipment manufacturers in narrowing the technology gap with established global competitors.
While Chinese companies remain behind international leaders in advanced lithography and certain inspection technologies, they have become competitive in other areas including:
- Etching
- Deposition
- Cleaning
- Chemical mechanical planarization (CMP)
According to Dan Hutcheson, Vice Chairman of research firm TechInsights, Chinese equipment is often priced 20% to 30% below comparable products offered by Western manufacturers, making it increasingly attractive for customers seeking lower costs alongside supply-chain diversification.
AMEC’s etching systems are already deployed by leading Chinese memory producer Yangtze Memory Technologies (YMTC), providing additional confidence that some of its technology has reached commercial maturity.
Western Suppliers Face Emerging Competition
Samsung’s NAND flash memory plant in Xi’an and SK Hynix’s NAND and DRAM facilities in Dalian and Wuxi currently rely heavily on equipment supplied by U.S. companies including Applied Materials and Lam Research.
A successful qualification by either Korean manufacturer would represent a significant commercial endorsement for AMEC and could eventually increase competitive pressure on established global equipment makers, including Applied Materials, Lam Research and KLA, as well as Japanese and European rivals.
China remains one of the industry’s largest markets. Applied Materials generated $8.53 billion in revenue from China during fiscal 2025, representing approximately 30% of its global sales.
Even if Chinese equipment receives technical approval, however, replacing entrenched Western suppliers would likely take years because semiconductor manufacturing tools undergo extensive qualification procedures before entering production.
Other obstacles include smaller service networks, intellectual property concerns and potential geopolitical pressure from Washington discouraging adoption of Chinese technology.
The sources also noted that it remains unlikely Samsung or SK Hynix would install Chinese equipment at fabrication facilities in South Korea because of security and intellectual property considerations.
The broader trend nevertheless reflects China’s accelerating progress toward semiconductor self-sufficiency.
According to Deutsche Bank estimates, Chinese equipment manufacturers including Naura Technology, AMEC, Piotech and ACM Research are each expected to generate more than $1 billion in revenue during 2026.
Collectively, those companies could capture 25% to 30% of China’s projected $28 billion wafer fabrication equipment market this year. Excluding lithography and metrology equipment, Chinese manufacturers’ market share could approach 40%, highlighting the rapid expansion of domestic suppliers in segments where technological barriers are lower.
However, the evaluations demonstrate how geopolitical tensions are fundamentally reshaping procurement strategies across the semiconductor industry. Rather than relying exclusively on established Western suppliers, multinational chipmakers operating in China are now exploring domestic alternatives as insurance against future export restrictions.