China Mandates 50% Domestic Equipment Rule for Chipmakers to Build Self-Sufficient Supply Chain

China has introduced a significant new requirement for its semiconductor industry, mandating that chipmakers use at least 50% domestically made equipment when adding new production capacity. The rule, while not publicly documented, has been communicated to manufacturers seeking state approval for plant construction or expansion in recent months. Policy Implementation and Requirements Chipmakers must demonstrate through procurement tenders that at least half their equipment will be Chinese-made to secure government approval. Applications failing to meet this threshold are typically rejected, though authorities provide flexibility depending on supply constraints. The requirements are relaxed for advanced chip production lines where domestically developed…