Samsung Electronics and SK Hynix, the world's two largest memory chipmakers, have been testing chipmaking equipment from the Chinese manufacturer Advanced Micro-Fabrication Equipment Inc. (AMEC) for approximately two years. These trials, first reported by Reuters on August 5, serve as a strategic hedge against increasingly restrictive U.S. export controls that threaten to cut off the two companies from essential maintenance, software updates, and repair support for tools currently operating in their Chinese factories.
While Samsung has explicitly denied testing AMEC equipment at its Chinese sites or considering such actions, and SK Hynix has declined to comment, engineers at both organizations reportedly began qualifying AMEC’s etching tools around two years ago. At that time, the long-term outlook for importing U.S. chipmaking technology into China remained uncertain.
The regulatory environment for these companies has been volatile. In 2023, the U.S. Commerce Department designated the firms' Chinese facilities as validated end users, allowing for the import of certain controlled equipment without individual licenses. However, Washington revoked this status in 2025, replacing it with a narrower annual license for 2026. This inconsistency has left the manufacturers concerned about the continued availability of support for their existing American and Dutch-made equipment, a critical issue for production lines that require extreme precision.
Simultaneously, China is accelerating its drive for hardware self-sufficiency. A Shanghai-based state-backed manufacturer, identified as Shanghai Aishengna Electronic Technology Group, began mass-producing immersion deep ultraviolet (DUV) lithography machines in late July. The company intends to deliver roughly five units this year and about 20 by 2027 to leading domestic chipmakers. While these machines, which etch circuit patterns, fall short of the capabilities of the EUV systems produced by the Dutch firm ASML, they represent a significant step in China's domestic capacity.
Beyond hardware, China is pushing into the AI chip market. Huawei plans to launch its Ascend 950 processors and the Atlas 950 SuperPod system in South Korea during the fourth quarter of 2026. Positioned as a cheaper, inference-focused alternative to Nvidia’s export-compliant H20 chip, Huawei claims its product offers roughly 2.87 times the performance of the H20 at about one-quarter of the price. Huawei has already secured distribution agreements with Korean partners Hansol PNS and SK Shieldus.
Oxford University expert Carl Benedikt Frey suggests that China’s “move fast and regulate later” approach has accelerated development in sectors like AI and renewable energy, though he notes this strategy raises questions regarding the quality and security of Chinese innovations. While Huawei’s AI chip launch remains on track, potential concerns over security and software support could impact its adoption in the South Korean market.
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Experts point to Beijing’s approach to industrial regulation as one of its key drivers for this rapid development of cutting-edge technology. Carl Benedikt Frey, an associate professor of AI & Work at the Oxford Internet Institute and a Fellow of Mansfield College at the University of Oxford, recentlyargued that China’s “move fast and regulate later” strategy has spurred growth in emerging technology like artificial intelligence and renewable energy at an accelerated pace, although that strategy raises questions about the security and quality of Chinese innovations.
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Md. Kazi Bijoy is a dedicated tech enthusiast and content creator with a passion for digital innovation. With years of experience in the tech industry, he specializes in breaking down complex topics into easy-to-understand guides. When he isn’t writing, he explores the latest gadgets and researches emerging trends in the digital world.