Samsung Electronics and SK Hynix are evaluating semiconductor manufacturing equipment produced by China’s Advanced Micro-Fabrication Equipment (AMEC) for possible deployment at their production facilities in China, according to a Reuters report citing three people familiar with the matter. The assessments come as the two South Korean memory chipmakers seek to reduce the risks associated with the possibility of tighter US export controls affecting their operations in China.
According to Reuters, the companies began testing AMEC’s semiconductor etching equipment around two years ago, when uncertainty was increasing over whether Washington would continue allowing them to import US-made chip manufacturing tools into their Chinese factories. Although the evaluations have not yet led to decisions on broader deployment, the trials represent a significant opportunity for the Shanghai-based equipment manufacturer to demonstrate the competitiveness of its technology to two of the world’s largest semiconductor producers.
The reported testing also illustrates a broader consequence of US technology restrictions. Measures intended to limit China’s semiconductor ambitions have, according to Reuters, created opportunities for Chinese equipment manufacturers to establish a presence within foreign-owned fabrication plants operating inside China. All of the sources cited by Reuters requested anonymity because of the sensitivity of the matter.
Samsung told Reuters in a statement 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 (BIS), which administers US export controls, did not immediately respond to Reuters’ requests for comment.
The report outlines the changing regulatory environment facing foreign semiconductor manufacturers operating in China. In 2023, the US Commerce Department designated Samsung’s and SK Hynix’s Chinese manufacturing facilities as “validated end users” (VEU), allowing them to import certain controlled US semiconductor equipment without obtaining individual licences. Reuters reported that Washington revoked those authorisations in 2025 before later granting annual licences permitting the companies to import chip manufacturing equipment into their Chinese facilities during 2026.
Despite those licences, Reuters reported that both companies remain concerned that future US restrictions could extend beyond new equipment to include servicing, repairing or replacing Western-made tools already installed at their Chinese factories. As a precaution, the companies are reportedly maintaining relationships with Chinese equipment suppliers as a potential means of supporting and upgrading existing production lines rather than expanding manufacturing capacity in China.
Samsung operates a NAND flash memory plant in Xi’an, while SK Hynix runs NAND facilities in Dalian and a DRAM memory chip plant in Wuxi. According to Reuters, these facilities currently depend heavily on etching equipment supplied by US companies including Applied Materials and Lam Research.
For AMEC and China’s expanding semiconductor equipment industry, securing approval from either Samsung or SK Hynix would represent an important commercial endorsement. Reuters reported that although Chinese manufacturers continue to trail international competitors in advanced lithography and some inspection technologies, they have significantly narrowed the technological gap in areas such as etching, deposition, cleaning and planarisation, often while offering substantially lower prices.
Dan Hutcheson, vice-chair of research firm TechInsights, told Reuters that comparable Chinese equipment can cost between 20% and 30% less than products supplied by established international manufacturers. Reuters also reported that AMEC equipment is already being used by major Chinese semiconductor companies, including NAND flash producer Yangtze Memory Technologies Co (YMTC), giving Samsung and SK Hynix greater confidence that some of the company’s systems are sufficiently mature for evaluation.
The growing capabilities of Chinese equipment manufacturers could pose a longer-term competitive challenge to industry leaders including Applied Materials, Lam Research, KLA and their Japanese and European counterparts, which have traditionally dominated key segments of the wafer fabrication equipment market. China remains an important source of revenue for these companies, with Reuters noting that Applied Materials generated US$8.53 billion in revenue from China during fiscal 2025, representing 30% of its total sales.
Reuters reported that any significant breakthrough for Chinese suppliers would still face considerable obstacles, including lengthy equipment qualification processes, smaller global service networks, intellectual property concerns and potential political pressure from Washington. It also remains uncertain whether South Korean chipmakers would consider deploying Chinese-made equipment at their domestic manufacturing facilities because of security and intellectual property considerations.
Nevertheless, Reuters reported that US export controls have created favourable conditions for China’s semiconductor equipment industry. Citing Deutsche Bank estimates, the report said that Naura Technology, AMEC, Piotech and ACM Research are each expected to generate more than US$1 billion in revenue during 2026. Together, those companies could account for between 25% and 30% of China’s projected US$28 billion wafer fabrication equipment market this year, while their combined market share could approach 40% when advanced lithography and metrology equipment are excluded.
