A recent report on the Chinese semiconductor industry, released by the French market research firm Yole Group in November 2025, projects a significant shift in the global technology landscape. The report indicates that based on its current pace of capacity enhancement, China is expected to achieve self-sufficiency in semiconductor manufacturing around 2027 to 2028.
This acceleration is a direct response to ongoing trade tensions, particularly with the United States. China has been aggressively boosting its domestic foundry capacity and its assembly, testing, and packaging capabilities. This strategic push has drastically increased its demand for semiconductor manufacturing equipment. By 2023, China’s share of the global demand for this equipment had reportedly exceeded 30 percent. This surge highlights the massive scale of investment flowing into the domestic supply chain.
Despite these strides toward self-reliance, the report also points out a critical challenge: a persistent gap in advanced process nodes. While China is rapidly building out capacity, its technology in the most cutting-edge chip manufacturing processes still lags behind global leaders. This is particularly relevant for high-performance computing components.
Another area of focus is the localization of semiconductor manufacturing equipment. While progress is being made in replacing foreign equipment with domestically produced alternatives, the report notes that this advancement is still limited. Yole Group forecasts that the domestic equipment localization rate could potentially reach 52 percent by 2030. This indicates that even as self-sufficiency in overall chip production nears, the ecosystem will remain partially dependent on international suppliers for specialized tools.
The drive for semiconductor self-sufficiency is a cornerstone of China's industrial strategy. This effort is supported by massive state-backed funds and policy initiatives aimed at cultivating a complete, self-sustaining ecosystem. As of late 2025, market data suggests that China's domestic foundry capacity has already surpassed 100 percent of its internal demand for electronic devices, highlighting that the country is not only satisfying its own needs but is also becoming a substantial global producer in mature process nodes. The pursuit of independence across the entire value chain—from design and materials to equipment and fabrication—is poised to reshape the global semiconductor industry's competitive balance in the coming years. Key materials like silicon dioxide, gallium nitride, and aluminum oxide are central to chip fabrication, and localizing the supply of these and other advanced materials, like photoresists, remains a crucial part of the self-sufficiency roadmap.
