China Now Builds 35% of Its Own Chip Tools. The Valve That Controls the Gas Inside Is Still 90% Foreign.
China's chipmaking-tool industry just crossed a symbolic line — over a third of the machines going into its fabs are now domestically built, up from a quarter two years ago. But open the box, and the parts that actually touch the physics — the valve metering gas into the chamber, the generator igniting the plasma — are still made almost nowhere but Switzerland and the U.S.
Zoom into the tool: watch "self-sufficient" shrink
Simplified schematic of an etch/deposition tool, not a real machine's floor plan. Step through three levels of the same tool — the whole housing, the RF generator, the gas valve — and watch the domestic-vs-foreign split fall at each level. The 8% figure for valves is an illustrative point standing in for the reported "under 10%."
The plain version
Think of China's chip-tool industry as a car-parts factory. It's gotten very good at stamping out the body panels, chassis, and wheels — the big machines, called etch and deposition tools, that carve and build up microscopic patterns on a silicon wafer. About 35% of the machines going into Chinese chip factories are now made domestically, up from a quarter two years ago. That's genuinely impressive progress.
But pop the hood, and two small parts under there are still imported almost entirely. One is a valve about the size of a fist that controls exactly how much gas flows into the vacuum chamber — too much or too little and the whole wafer comes out wrong. A single Swiss company, VAT Group, makes most of the world's high-end versions; Chinese-made valves show up in fewer than one in ten of the best machines. The other is the power generator that turns ordinary electricity into the radio-frequency energy that ignites plasma — the "torch" that actually etches the silicon. Two American companies dominate that market; Chinese versions are used in only about one in five high-end tools.
Both parts demand tolerances measured in fractions of a percent, tuned over decades of trial and error that nobody's written down in a manual. That's a much harder thing to copy than sheet metal — which is also why the newest wave of export restrictions increasingly targets these exact components, instead of whole machines.
The expert version
China's wafer-fab-equipment (WFE) domestic content reached roughly 35% in early 2026, per market trackers, up from about 25% two years earlier — driven by maturing etch, deposition, and lithography tool lines from firms including AMEC, Naura, and SMEE. But localization is uneven across the bill of materials, concentrated in two subsystems that resist it almost entirely.
Precision vacuum valves — gate and pendulum valves that throttle process gas into the chamber with sub-percent repeatability, critical to etch/deposition uniformity across a 300mm wafer — remain dominated by Switzerland's VAT Group, which holds an estimated 60–70% global market share. High-end configurations in Chinese-built tools are reportedly under 10% domestically sourced.
RF power delivery — the generators and matching networks converting line power into the 13.56MHz-plus RF energy that strikes and sustains plasma for etch and PECVD steps — is concentrated among three U.S. firms: Advanced Energy Industries, MKS Instruments, and Comdel, together holding an estimated 65–75% of the global market. Domestic Chinese RF power penetration in high-end tools sits near 20%.
Both subsystems require closed-loop control tolerances — gas-flow variance under 1%, RF impedance matching on millisecond timescales — built on decades of empirical tuning data that patents and spec sheets don't fully capture: tacit engineering knowledge that's slow to reverse-engineer regardless of capital deployed. That gap is strategically legible, too — recent revisions to U.S. and allied export-control rules increasingly name specific sub-components rather than only finished tool models, since restricting one high-leverage component chokes many downstream tool types at once, a broader effect than restricting a single machine.
Why it matters for tech + supply chain: the next wave of chip export controls is targeting the small, hard-to-copy parts inside the machines — not just the machines themselves — which means China's path to truly sanctions-proof chipmaking is much longer than the 35% headline suggests.
Why it matters for tech + supply chain: aggregate WFE self-sufficiency metrics overstate resilience — the control-critical subsystems most exposed to export restriction are exactly the ones localization hasn't reached, which is where the next round of targeted controls is heading.