According to Reuters on August 5, citing three sources, South Korean memory chip giants Samsung Electronics and SK Hynix are evaluating chipmaking equipment from China's leading semiconductor equipment maker AMEC, considering using it at their factories in China to hedge against supply chain risks from increasingly stringent US export controls. News of this sent A-share semiconductor equipment stocks surging, with AMEC's share price rising over 13% intraday.
On the surface, this looks like just a "spare tire plan" prepared by the two Korean giants for their production lines; on a deeper level, it signals that the global chip supply chain is accelerating its restructuring under the shadow of controls, and Chinese semiconductor equipment may have quietly taken a key step from "domestic substitution" to "global supply chain."
Testing Began Two Years Ago: From "Uncertainty" to "Must-Have Backup"
According to two sources, Samsung and SK Hynix began testing AMEC's etching equipment about two years ago. At that time, it was increasingly uncertain whether Washington would continue allowing these two companies to import US chipmaking equipment for their China factories.
Reviewing the policy timeline: In 2023, the US Commerce Department designated Samsung and SK Hynix's China factories as "Validated End Users" (VEU), allowing them to import certain controlled US equipment without case-by-case license applications. However, in 2025, Washington revoked this authorization and instead issued import licenses to the two companies for 2026. The shift from a lenient to a strict licensing regime made the Korean giants keenly feel the risk of having their supply chain lifeline squeezed by external forces.
What worries them more, sources say, is that future restrictions may extend beyond imports of new equipment to the maintenance, repair, and replacement of Western equipment already installed in their China factories. In other words, even if existing lines operate normally, a shortage of spare parts or repair services for US equipment could disrupt supply. It is precisely this concern about long-cycle operations and maintenance that has led the two companies to list Chinese equipment suppliers as important alternatives.
Samsung currently operates a NAND flash plant in Xi'an, while SK Hynix has a NAND production base in Dalian and a DRAM plant in Wuxi. These lines rely heavily on etching equipment from US suppliers such as Applied Materials and Lam Research. Testing Chinese equipment is essentially paving the way for a worst-case scenario — it neither affects current production capacity nor prevents a quick switch should controls tighten further.
Why AMEC? A Standout Domestic Player in Etching
Etching, along with lithography and thin-film deposition, is one of the three core processes in chip manufacturing, directly determining the precision and yield of transistor patterns. AMEC's ability to catch the attention of the two memory giants stems from its long-term focus on plasma etching.
According to AMEC disclosures, the company has developed 54 types of high-end semiconductor equipment, including 26 high-energy and low-energy plasma etchers, 24 thin-film deposition systems, as well as chemical mechanical polishing (CMP) and metrology/inspection equipment. Its etching and thin-film processing precision has reached atomic-level. In memory chips, high-aspect-ratio etching is a key technology in the stacking race for 3D NAND, and AMEC's etching equipment is a strong contender in this segment.
Another important endorsement is customer validation. Sources noted that AMEC equipment has been adopted by leading Chinese chipmakers such as YMTC, giving Samsung and SK Hynix more confidence in the maturity of some of its systems. Industry observers generally believe that while Chinese equipment makers still lag overseas rivals in advanced lithography and some inspection systems, the gap in etching, deposition, cleaning, and planarization has narrowed significantly, and costs are often 20% to 30% lower — a cost-performance advantage that cannot be ignored in the fiercely price-competitive memory industry.
Markets Vote With Their Wallets: Logic of Domestic Equipment Going Global Ignites
After the news broke, capital markets responded enthusiastically. On August 5, A-share semiconductor equipment stocks strengthened across the board, with AMEC rising more than 13% at one point and semiconductor equipment theme ETFs gaining over 7%. Behind the capital rush is a repricing of the industry's "second growth curve" for domestic equipment.
Institutional analysts believe that if AMEC equipment enters the China factory supply chains of Samsung or SK Hynix, its significance goes far beyond a single order:
- First, gaining rigorous certification from the world's top memory manufacturers is the strongest commercial endorsement and will significantly boost the international credibility of domestic equipment;
- Second, the demonstration effect may spread to these Korean companies' factories in other regions, accelerating collective validation for domestic components and supporting equipment makers;
- Third, moving from "domestic substitution" to "overseas supply" opens an entirely new growth space for the entire equipment supply chain.
On the fundamentals, AMEC's business climate also confirms this logic. The company's H1 2026 earnings forecast shows expected revenue of approximately RMB 6.691 billion, up about 34.89% year-on-year; net profit attributable to shareholders of RMB 2.7 billion to 2.9 billion, up 282.48% to 310.81% year-on-year; and non-GAAP net profit of RMB 1 billion to 1.2 billion, up 85.61% to 122.73%. Full order books and sharply improved profitability provide a solid foundation for taking on international customers' validation and integration.
The Control Paradox: US Restrictions Create Opportunities for Chinese Equipment
Reuters noted in its report that these tests highlight the core paradox of US technology controls — measures intended to curb China's semiconductor ambitions are instead creating opportunities for Chinese competitors to gain a foothold in foreign-owned factories operating in China.
From a broader perspective, this event is a microcosm of Asia's semiconductor supply chain restructuring. Over the past few years, the global equipment market has been dominated by US, Japanese, and Dutch suppliers, with a highly concentrated supply chain. With export controls becoming the norm, "multi-source backup" and "regionalized layout" have become consensus choices across the industry. While assessing Chinese equipment, the Korean giants are also expanding local production of materials, parts, and equipment — supply chain diversification is turning from a slogan into reality.
For traditional equipment giants, this trend poses considerable challenges. Applied Materials, Lam Research, Tokyo Electron, and others have deep roots in the Chinese market. If Korean manufacturers gradually divert orders, the competitive landscape of the global equipment market will face a reshuffle. For emerging semiconductor bases in Southeast Asia and South Asia, supplier diversification also means greater bargaining power and more flexible construction options.
Caution and Outlook: When Will Backup Become a Must?
Of course, there are still many uncertainties in the process. Sources stressed that no decision has yet been made on whether to deploy AMEC equipment on a large scale based on evaluation results. Samsung denied in a statement to Reuters that it is testing AMEC equipment for its China factories, while SK Hynix declined to comment. The two companies also made clear that bringing in Chinese suppliers is more of a backup plan to "maintain and upgrade existing lines" rather than a signal to expand production capacity in China.
In the short term, testing remains at the "backup option" stage — it serves both as a supply chain safety insurance and as bargaining leverage in negotiations with Western equipment makers. But in the long run, against the backdrop of normalized controls and elevated geopolitical risks, it may only be a matter of time before domestic equipment enters the supply chains of international giants. This incident also reminds the global industry that in a game of technological blockade, no one is immune; supply chain resilience comes precisely from diversified choices.
For China's semiconductor equipment industry, the signal from this "breakthrough test" is worth pondering: true internationalization is not created through policy support alone but must be forged on the most demanding production lines of international customers. Only with solid technology and reliable service can Chinese equipment turn from a "backup option" into a "must-have option" and secure a place in the restructuring of the global chip supply chain.
