Samsung and SK Hynix test Chinese chip equipment as hedge against tighter US export controls — major chipmakers pivoting supply chains.

Samsung Electronics and SK Hynix, the world's two largest memory chipmakers, have been evaluating chipmaking equipment from China's Advanced Micro-Fabrication Equipment Co. (AMEC) for possible use at their Chinese factories, according to sources familiar with the matter. The South Korean companies began testing AMEC etching equipment roughly two years ago as they hedged against the risk of tightening U.S. export controls. Both Samsung and SK Hynix have publicly denied conducting such evaluations, though the companies remain concerned about potential future restrictions on servicing, repair, and replacement of Western equipment already installed at their Chinese facilities.

These evaluations trace back to regulatory changes affecting the companies' Chinese operations. The U.S. Commerce Department designated both companies' Chinese factories as "validated end users" in 2023, allowing them to import certain controlled American chipmaking equipment without individual export licenses. Washington revoked that authorization in 2025 before granting annual licenses permitting continued imports specifically for 2026. However, the temporary nature of this arrangement has prompted both companies to explore alternatives, keeping Chinese suppliers in reserve as a potential way to maintain and upgrade existing production lines rather than expand overall capacity.

Samsung operates a NAND flash memory plant in Xian, China, while SK Hynix runs NAND facilities in Dalian and a DRAM memory plant in Wuxi. Both companies' Chinese operations rely heavily on etching equipment from American suppliers including Applied Materials and Lam Research, underscoring their exposure to potential servicing restrictions on Western tools.

For AMEC and China's broader semiconductor equipment industry, preliminary approval from Samsung or SK Hynix would represent significant commercial validation. Chinese equipment makers have narrowed the competitive gap with Western suppliers in etching, deposition, cleaning, and planarization, often at meaningfully lower prices. According to Dan Hutcheson, vice chair of research firm TechInsights, Chinese chipmaking tools can cost 20 to 30 percent less than comparable foreign equipment. AMEC's systems are already deployed at leading Chinese chipmakers including Yangtze Memory Technologies Co., giving Samsung and SK Hynix greater confidence in testing their maturity. AMEC Chief Executive Gerald Yin Zhiyao has described the company's etching technology as supporting processes ranging from 65-nanometer nodes to 5-nanometer and 3-nanometer nodes, with some products already adopted by Taiwan Semiconductor Manufacturing Co.

Chinese equipment suppliers could pose a longer-term competitive challenge to dominant Western toolmakers including Applied Materials, Lam Research, and KLA, along with established Japanese and European rivals. China remains a significant revenue source for these companies despite regulatory tightening; Applied Materials reported $8.53 billion in China revenue during fiscal 2025, representing roughly 30 percent of total global sales.

Any breakthrough for Chinese equipment suppliers in foreign-owned facilities faces significant obstacles, including lengthy technical qualification processes, smaller service networks, intellectual property concerns, and potential political pressure from Washington. Chinese suppliers also maintain only marginal presence in Western domestic factories outside China.

Nonetheless, U.S. export controls have created a more favorable environment for China's semiconductor equipment industry. Deutsche Bank estimates that four Chinese equipment makers—Naura Technology, AMEC, Piotech, and ACM Research—will each generate more than $1 billion in revenue during 2026. Combined, these companies could capture 25 to 30 percent of China's projected $28 billion wafer-fabrication equipment market this year, potentially approaching 40 percent when excluding lithography and metrology segments where Western and Japanese suppliers maintain a stronger technological lead.

With Samsung and SK Hynix's current annual licenses extending through 2026, both companies will likely continue monitoring how Washington's export control policy evolves, particularly regarding servicing and maintenance access for equipment already installed at their Chinese facilities. Whether either company ultimately moves beyond preliminary testing toward broader deployment of Chinese-made equipment remains uncertain, but these evaluations underscore how directly U.S. policy decisions shape strategic planning across the global semiconductor supply chain.