Reuters reported the evaluations focus on backup options for maintaining existing production lines in China, not capacity expansion, as chip equipment export restrictions could tighten further.
Samsung Electronics and SK Hynix are evaluating etching equipment from China's AMEC for possible use at their factories in China as they prepare for the risk of tighter U.S. chip equipment export restrictions, Reuters reported, citing multiple people familiar with the matter. The testing began about two years ago, but neither company has decided to expand deployment. The contingency planning reflects concern that future restrictions could go beyond new equipment and also affect maintenance, repairs and replacement parts for existing Western tools already installed at their China fabs. In that scenario, Chinese suppliers would serve as a backup to sustain and upgrade current production lines rather than to add new capacity in China. Samsung Electronics denied it had tested or considered using AMEC tools in its China plants, while SK Hynix declined to comment. AMEC and the U.S. Commerce Department's Bureau of Industry and Security did not immediately respond to requests for comment. The issue comes after the U.S. Commerce Department designated the companies' China factories as Validated End Users in 2023, then revoked that status in 2025 and issued one-year licenses allowing equipment imports through 2026. Samsung Electronics operates a NAND plant in Xi'an, while SK Hynix runs a NAND plant in Dalian and a DRAM plant in Wuxi. Those lines currently depend heavily on etching tools from U.S. suppliers including Applied Materials and Lam Research. Reuters said AMEC's tools are already used by Chinese chipmakers including YMTC, and TechInsights estimated Chinese chip equipment is generally priced 20% to 30% below comparable foreign products. Deutsche Bank estimated Naura Technology Group, AMEC, Piotech and ACM Research could each exceed $1 billion in revenue in 2026, while together capturing 25% to 30% of China's roughly $28 billion wafer fabrication equipment market this year. Excluding lithography and metrology tools, Chinese suppliers' share could approach 40%, though hurdles remain including lengthy qualification cycles, smaller service networks, intellectual property concerns and political pressure.