--- title: "China's chip-equipment self-reliance hits 35%, but the weak spot moved to lithography" date: 2026-10-31 category: Chips & Compute site: NeuroAI canonical: https://neuroai.site/a/na-chips-equipment-localization-35 language: en --- # China's chip-equipment self-reliance hits 35%, but the weak spot moved to lithography > China's semiconductor equipment localization reached 35% in early 2026, yet lithography and metrology remain the stubborn gaps. A fab manager in China used to wait months for a single imported tool, then pray the shipment cleared customs. This year that wait looks different for most of the line — but not for the machines that matter most. The shift is visible in the numbers. According to the China Semiconductor Industry Association (CSIA), domestic equipment self-reliance reached about 35 percent by the start of 2026, up from roughly 18 percent in 2022 and 25 percent at the end of 2024, clearing a 30 percent target the Ministry of Industry and Information Technology had set for late 2025. ## Key takeaways - CSIA data puts China's overall chip-equipment localization rate (国产化率) at about 35 percent in early 2026, a ten-point jump from two years earlier. - In mature segments — etching, deposition, cleaning and chemical-mechanical polishing — domestic tools now exceed 40 percent of the local market. - On 28 nm-and-above lines, coverage by domestic equipment has crossed 80 percent, the segment that drives most of global chip volume. - Lithography remains the deepest gap: domestic sources estimate lithography localization below 1 percent, and metrology-and-inspection (量检测) between 1 and 10 percent. - The progress is concentrated in tools China can build without EUV, leaving the most valuable and hardest step still dependent on foreign supply. ## Where China caught up The gains are real and concentrated in the unglamorous middle of the line. Etching, thin-film deposition, cleaning and CMP are processes where Chinese suppliers — led by NAURA and AMEC — have moved from trial installs to volume qualification at major fabs. On mature nodes, where roughly 70 percent of chip demand by volume lives, domestic equipment is now cheap enough and fast enough to displace imports. That matters because mature-node capacity is exactly what China is building aggressively. Each new wafer line that sources 80 percent of its tools locally is a line that does not send foreign-exchange outflows abroad or sit exposed to a single export license. ## The lithography wall Lithography is the obvious exception. Shanghai Micro Electronics Equipment (SMEE) has delivered 90 nm-class deep-ultraviolet (深紫外, DUV) scanners, but the gap to ASML's advanced DUV and EUV systems is measured in years, not percentage points. Lithography is about a quarter of equipment spending, which is precisely why the self-reliance number is 35 percent and not 50. The harder, quieter gap is metrology and inspection (量检测). These are the tools that measure and verify quality during manufacturing — the domain where KLA dominates globally. Chinese alternatives are still in early development, and analyst estimates put localization there between 1 and 10 percent. A fab can buy domestic etchers and still need foreign metrology to know whether the wafers are any good. ## Why the gap persists The reason is physics and economics, not effort. EUV machines print the finest features in a handful of exposures; without them, fabs must repeat DUV exposures many times, multiplying cost, time and defect risk. Metrology tools require decades of accumulated defect libraries and process knowledge that no subsidy compresses into a single product cycle. There is also a structural trap. Because the leading edge keeps moving, closing today's gap does not close tomorrow's. Each node shift reopens the same questions about the newest scanners and the smartest inspection software. Subsidies help buy capacity, but they cannot compress a decade of process knowledge into a single product cycle, which is why the metrology gap is the hardest to close quickly. ## What it means for buyers For Chinese fabs expanding mature capacity, the practical effect is shorter lead times and lower cost — domestic tools are typically 20 to 30 percent cheaper with delivery three to six months faster. For the cutting edge, the story is unchanged: the bottleneck is the machine that draws the pattern and the machine that checks it. That split reality means China can now industrialize the bulk of the chip market on its own terms, while still renting the frontier from abroad. Foreign equipment giants feel the squeeze on the parts China can replace, but they keep the high ground where it counts. The 35 percent milestone is real; it is also a map of what is still missing. ## Honest limitations The 35 percent headline and the segment-level figures are reported as CSIA data by multiple Chinese industry outlets and analyst notes; this review did not access the original CSIA release directly, so the figures should be read as industry-association estimates rather than audited statistics. The sub-1 percent lithography and 1 to 10 percent metrology ranges come from securities-research reports cited in secondary sources, not from a primary government document. Specific vendor revenue figures in circulation conflict and were deliberately omitted. No export-control or subsidy figure is stated here as definitive. ## What readers can do now - If you invest in or buy from the semiconductor supply chain, watch metrology-and-inspection (量检测) vendors — that is the next gap to close, not another etching story. - For fab planners, assume mature-node domestic tools are now qualified, but keep foreign lithography and metrology in the critical path. - Track CSIA's periodic localization disclosures as the cleanest public signal of where the next bottleneck sits. --- Published by NeuroAI (https://neuroai.site/) — https://neuroai.site/a/na-chips-equipment-localization-35 Free to quote with attribution and a link to the original.