Samsung, SK Hynix Eye Chinese Suppliers as US Export Curbs Loom

South Korean chip giants Samsung Electronics and SK Hynix are exploring the use of Chinese semiconductor equipment, specifically testing etching tools from Shanghai-based Advanced Micro-Fabrication Equipment (AMEC). This evaluation, which began approximately two years ago, is a strategic move to mitigate the risks associated with escalating U.S. export controls on advanced technology.

The trials are not aimed at expanding manufacturing capacity in China but rather serve as a contingency plan. Concerns persist that future U.S. restrictions could impact the servicing, repair, or replacement of existing Western chipmaking tools at Samsung's NAND flash plant in Xian and SK Hynix's NAND facilities in Dalian and DRAM plant in Wuxi.

For AMEC and other emerging Chinese equipment makers, gaining validation from global leaders like Samsung and SK Hynix would be a significant commercial endorsement. While still trailing in some advanced areas, Chinese firms have narrowed the gap in etching and deposition, offering equipment at 20% to 30% lower costs than their foreign counterparts. AMEC equipment is already used by leading Chinese chipmakers such as Yangtze Memory Technologies Co (YMTC).

Despite potential hurdles like lengthy qualification processes and intellectual property concerns, the U.S. export controls have inadvertently created a market opportunity for Chinese suppliers. Deutsche Bank forecasts that companies like AMEC and Naura Technology will generate substantial revenue in 2026, potentially capturing a significant share of China's wafer-fabrication equipment market, particularly in segments excluding lithography.