China now demands chipmakers prove 50% of their tools are domestically made to get state approval for new capacity

Chipmakers now face a hard requirement before adding new factory capacity, as they must show that at least 50% of their equipment is domestically made to secure state approval, according to a report from Reuters. Three people familiar with the process said authorities have allegedly delivered this message directly to companies seeking clearance. The rule is not written into public policy, but it is being enforced through procurement reviews tied to plant construction and expansion. China is using this gatekeeping method to force local sourcing at scale. Companies are required to submit tenders that clearly list equipment origins. If the domestic share falls below the threshold, approvals usually stop there. Officials may allow limited flexibility when supply gaps exist, especially for advanced production lines where local tools are still incomplete. One person said regulators actually want the ratio higher. “Authorities prefer if it is much higher than 50%,” the source...

https://www.cryptopolitan.com/chipmakers-50-home%e2%80%91grown-china-clearance/