Samsung and SK Hynix Assess Chinese Chip Equipment Amid Export Control Uncertainty

Samsung Electronics and SK Hynix are evaluating semiconductor manufacturing equipment from China’s Advanced Micro-Fabrication Equipment (AMEC) for potential use at their factories in China. The assessments come as the South Korean memory chipmakers prepare for the possibility of tighter United States export controls that could affect access to Western chipmaking tools.

The evaluations, which began around two years ago, have not yet resulted in decisions on broader deployment. However, they highlight how changing trade restrictions are creating new opportunities for Chinese equipment manufacturers to compete with established global suppliers.

Chipmakers Test Chinese Etching Equipment

According to people familiar with the matter, Samsung and SK Hynix started testing AMEC’s etching equipment when uncertainty grew over whether Washington would continue allowing them to import US chipmaking equipment into China.

The sources said the companies are still evaluating the technology and have not committed to wider adoption.

Samsung told Reuters that it has not tested AMEC equipment for use at its factory in China and has not considered doing so. SK Hynix declined to comment, while AMEC and the US Bureau of Industry and Security did not immediately respond to requests for comment.

Export Controls Drive Contingency Planning

The evaluations underline the impact of evolving US export controls on semiconductor manufacturers operating in China.

In 2023, the US Commerce Department granted Samsung and SK Hynix’s Chinese facilities “Validated End User” status, allowing them to import certain controlled US equipment without obtaining individual licences.

That authorisation was revoked in 2025. The companies later received annual licences permitting imports of chipmaking equipment into their Chinese factories during 2026.

Despite those approvals, industry sources said both companies remain concerned that future restrictions could extend beyond new equipment to cover servicing, repairs or replacement parts for Western tools already installed in their facilities.

As a result, Samsung and SK Hynix are evaluating Chinese suppliers as a contingency option to maintain and upgrade existing production lines rather than expand manufacturing capacity in China.

Samsung operates a NAND flash memory plant in Xi’an, while SK Hynix runs NAND production in Dalian and a DRAM facility in Wuxi. These factories currently depend heavily on etching equipment supplied by US companies, including Applied Materials and Lam Research.

Chinese Equipment Makers Seek Global Recognition

For AMEC, securing approval from leading international chipmakers would represent a significant commercial milestone.

Although Chinese manufacturers continue to lag behind global competitors in advanced lithography and certain inspection technologies, they have made substantial progress in areas such as etching, deposition, cleaning and planarisation. Industry analysts say these products are often priced between 20% and 30% below comparable equipment from established overseas suppliers.

AMEC’s systems are already used by major Chinese semiconductor manufacturers, including NAND producer Yangtze Memory Technologies Co, giving international companies greater confidence that some of the equipment is mature enough for evaluation.

Growing Competition in Semiconductor Equipment

The expansion of Chinese equipment suppliers could create long-term competitive pressure for established manufacturers such as Applied Materials, Lam Research, KLA and several Japanese and European companies that have traditionally dominated wafer fabrication equipment.

China remains one of the industry’s most important markets. Applied Materials reported China revenue of $8.53 billion during fiscal 2025, accounting for 30% of its total sales.

Even if Chinese suppliers secure broader acceptance, significant challenges remain. Lengthy qualification processes, smaller global service networks, intellectual property concerns and possible political pressure from Washington could all slow adoption.

Even so, analysts believe US export controls have accelerated the growth of China’s domestic semiconductor equipment industry. Deutsche Bank estimates that Naura Technology, AMEC, Piotech and ACM Research will each generate more than $1 billion in revenue during 2026. The bank also projects that Chinese suppliers could capture between 25% and 30% of China’s wafer fabrication equipment market this year, with their share approaching 40% in segments excluding lithography and metrology.

With inputs from Reuters