The Toolmakers

China is the biggest customer the chip-equipment industry has ever had, and it is quietly turning into its own supplier. In 2024 China bought a record roughly $49 billion of wafer-fab equipment, about 40% of the world’s total, more than Taiwan or Korea.^[1] Then it started making the tools itself.

Its domestic champions are growing fast. NAURA, the largest, reported multi-billion-dollar 2024 revenue up sharply; AMEC (Advanced Micro-Fabrication) grew around 45%.^[2] Both are strongest in etch and deposition, the steps where no like-for-like export ban applies, and are now credible enough to enter leading-edge lines: NAURA reportedly supplies more than 60% of the equipment on SMIC’s 28nm production, by one industry tally.^[3] Overall domestic tool content reached about 35% in 2025, beating Beijing’s 30% target.^[3]

Strong in the middle, empty at the edges

The average hides the shape. Localisation tops 40% in etch and deposition but sits near 18% in lithography and around 25% in metrology and inspection, and is close to zero in the hardest materials, such as advanced photoresists.^[3] These figures come from Chinese industry-association data relayed by trade press, so treat them as directional rather than audited.^[3] The pattern is consistent: China can increasingly build the tools for the steps that are merely difficult, and none of the ones that are truly hard.

China buys more chipmaking equipment than anyone on Earth, and can now make a third of it, except the parts that matter most.

The uneven localisation map is not a temporary artefact; it reflects a difficulty gradient. Etch and deposition are chemically and mechanically demanding but tractable, which is why domestic content there has climbed above 40%; lithography, high-end metrology and advanced photoresists sit at the far, hard end, where decades of accumulated process knowledge resist a fast catch-up. A single blended “35% localised” number therefore flatters the position by averaging the easy wins against the near-total gaps. The investable read is to weight the categories where China is genuinely closing ground against the ones where a high headline masks a dependency that a rival can still exploit.

The signal underneath

The equipment layer is where import-substitution is progressing fastest and most measurably, which makes the domestic toolmakers among the clearest ways to invest in the self-sufficiency drive — and export controls, by walling off foreign tools, have accelerated their revenue rather than slowed it. The discipline is to separate the categories where China is genuinely closing the gap (etch, deposition) from the ones where a headline localisation number papers over near-total dependence (lithography, metrology, photoresist). We map tool by tool, not average by average.