US Export Curbs on China Backfire, Creating Opportunities for Chinese Chip Equipment Makers

The Donald Trump administration’s export controls, designed to hamper China’s technological progress, are proving to be a double-edged sword, inadvertently creating opportunities for Chinese industry. One of the most notable consequences is that South Korea’s Samsung Electronics and SK Hynix are evaluating chip manufacturing equipment made by China’s Advanced Micro-Fabrication Equipment (AMEC) for potential use in their Chinese factories. The move is a strategic hedge against the risk of tightening US export controls, according to three sources familiar with the matter. In 2023, the US Commerce Department granted Samsung and SK Hynix’s Chinese facilities ‘validated end user’ (VEU) status, allowing them to import certain controlled US equipment without individual licences. However, Washington revoked this authorisation in 2025 and has since only granted annual permits for the firms to bring manufacturing gear into their Chinese plants for the 2026 period. Sources told Reuters that both companies remain wary that future restrictions could extend beyond the procurement of new equipment to include the maintenance, repair, and replacement of existing Western machinery already installed in their Chinese factories. Consequently, the chipmakers are preparing local Chinese suppliers as a fallback option to sustain and update their current production lines, rather than to expand capacity. Samsung operates a NAND flash memory plant in Xi’an, while SK Hynix has a NAND facility in Dalian and a DRAM chip plant in Wuxi. These factories are heavily reliant on etching tools supplied by US firms, including Applied Materials and Lam Research. The two Korean companies began testing AMEC’s etching equipment approximately two years ago amid growing uncertainty over whether Washington would continue to permit the import of US-made chip tools into China. While the evaluation has not yet led to broader adoption, it provides a rare opportunity for the Shanghai-based AMEC to gain validation from leading global chipmakers. This testing underscores a paradox at the heart of US technology control policy: measures designed to limit Beijing’s semiconductor ambitions are instead creating opportunities for Chinese competitors to secure a foothold in foreign-owned factories operating within China. In an official statement to Reuters, Samsung said it has never tested AMEC equipment for use in its Chinese plants and has never considered doing so. SK Hynix declined to comment, while AMEC and the US Bureau of Industry and Security (BIS) did not immediately respond to requests for confirmation. For AMEC and China’s growing ranks of semiconductor equipment manufacturers, securing approval from Samsung or SK Hynix would represent a powerful commercial endorsement. Although Chinese tool makers still lag behind foreign rivals in advanced lithography and some inspection systems, they have narrowed the gap in areas such as etching, deposition, cleaning, and planarisation, often at significantly lower cost. Chinese-made equipment can be sold for 20% to 30% less than comparable tools from established foreign suppliers, according to Dan Hutcheson, vice chair of research firm TechInsights. AMEC’s tools are already used by leading Chinese chipmakers, including NAND producer Yangtze Memory Technologies Co (YMTC), giving Samsung and SK Hynix confidence that some systems are mature enough for testing. The rise of Chinese suppliers could pose a long-term challenge to dominant players like Applied Materials, Lam Research, and KLA, as well as Japanese and European rivals. The Chinese market remains a crucial pillar for these global firms; Applied Materials recorded US$8.53 billion in revenue from China in fiscal 2025, accounting for 30% of its total sales. However, any breakthrough for Chinese suppliers will still face hurdles, including lengthy qualification processes, limited service networks, intellectual property concerns, and potential political pressure from Washington. It also remains unclear whether Korean chipmakers would dare install Chinese equipment in their domestic fabs due to security and IP risks. Nonetheless, US export restrictions have demonstrably opened a fertile gap for China’s equipment industry. Deutsche Bank estimates that Naura Technology, AMEC, Piotech, and ACM Research will each surpass US$1 billion in revenue by 2026.