Chinese semiconductor equipment manufacturers captured additional global market share even as U.S. export controls tightened, according to an analysis published by 24/7 Wall St.

The report's central finding — that Chinese chip tool suppliers are gaining ground despite American restrictions — points to a multi-year localization trend that accelerated after the Commerce Department's October 7, 2022 export-control update and expanded through the October 17, 2023 measures.

What the U.S. controls cover

The Bureau of Industry and Security (BIS) has progressively restricted exports of equipment used in advanced semiconductor production. Restricted categories include:

• Lithography tools, including deep-ultraviolet (DUV) immersion systems above specified throughput thresholds
• Plasma etch and chemical vapor deposition (CVD) tools for sub-14 nm logic production
• Specialized metrology, inspection, and overlay measurement systems
• Certain epitaxial and atomic-layer deposition subsystems

These measures targeted tools from Applied Materials, Lam Research, KLA, and ASML's most advanced EUV systems. Chinese fabs have increasingly turned to domestic alternatives where Western equipment is no longer accessible.

Chinese vendors scale up at mature nodes

Chinese equipment makers have scaled production of tools for 28 nm and above process nodes. Domestic foundries, facing constrained access to Western systems, have increased procurement of Chinese alternatives for mature-node capacity buildouts.

The Chinese vendor landscape spans multiple process-tool categories:

• AMEC competes in plasma etch
• Naura Technology covers oxidation, annealing, and CVD
• ACM Research specializes in single-wafer wet cleaning
• SMEE is the principal domestic lithography developer

State-directed capital, including funding administered through the National IC Industry Investment Fund (the "Big Fund"), has financed R&D and capacity expansion at domestic equipment firms across multiple phases since 2014.

Pressure on Western suppliers

Western tool vendors have reported revenue pressure in their China segments since the controls took effect. ASML has publicly noted that Chinese customers are ordering more less-advanced immersion DUV systems rather than EUV tools, which remain restricted. The shift has compressed U.S. suppliers' China revenue mix even as overall demand for AI accelerators has lifted order books.

Industry analysts expect Chinese localization to remain concentrated in trailing-edge and mature nodes for the foreseeable term. Domestic vendors continue to depend on imported subsystems for the most advanced applications, and no domestic EUV alternative has been commercialized.

What the report did not specify

The 24/7 Wall St. analysis did not provide a specific market-share figure for Chinese equipment makers, nor did it name executives quoted in the piece or specify which tool segments saw the largest share gains. Readers seeking a quantitative breakdown should consult the original article directly.