An Overview of the Most Competitive Domestic Equipment Substitutes as China Ramps up Its Semiconductor Independence Efforts

In recent years, China has been aggressively pursuing the build-out of an independent semiconductor supply chain as it attempts to eschew dependence on foreign suppliers. The key to China’s success is whether it can establish domestic suppliers of semiconductor equipment.

Looking at the current state of China’s semiconductor independence, it should be pointed out that Chinese suppliers of semiconductor equipment have been making the greatest progress on the CMP, etching, and cleaning fronts, while lagging behind in terms of deposition, ion implantation, and photolithography.

CMP equipment is used for polishing silicon wafers and metallic/non-metallic thin films. TrendForce estimates that about 26% of all such equipment procured by Chinese foundries in 2020 was sourced from domestic companies. CMP equipment manufactured by Chinese brands can support process technologies as advanced as the 14nm node, which is sufficient for meeting the current demand of Chinese foundries.

An indispensable aspect of silicon or dielectric etch applications, about 24% of all etching equipment procured by Chinese foundries in 2020 was sourced from domestic companies. Chinese-manufactured etching equipment can currently support process technologies as advanced as the 5nm node.

Used for cleaning wafers after the deposition process, CMP process, etching process, and ion implantation process, about 23% of all cleaning equipment procured by Chinese foundries in 2020 was sourced from domestic companies.

Cleaning equipment manufactured by Chinese brands can support process technologies as advanced as the 14nm node. Remarkably, more Chinese companies have been entering this market segment compared to other semiconductor equipment, while some Chinese suppliers are already able to compete with major foreign suppliers in terms of market shares.

Used for PVD, CVD, and ALD processes, about 10% of all deposition equipment procured by Chinese foundries in 2020 was domestically sourced. Chinese-manufactured deposition equipment can support process technologies as advanced as the 14nm node. However, as the technological barrier for manufacturing these products is relatively high, Chinese suppliers are still in the process of catching up to their global competitors in terms of technology. Hence, it remains difficult for Chinese suppliers to continue raising their market shares in the short run.

Likewise, as the technological barrier for manufacturing ion implantation and photolithography equipment is relatively high, equipment from Chinese suppliers is unlikely to support advanced process technologies in the short run despite these suppliers’ aggressive R&D efforts. In terms of self-sufficiency, about 5% and 1% of all ion implantation equipment and photolithography equipment, respectively, procured by Chinese foundries in 2020 was domestically manufactured.

（Cover image source: Unsplash）