# Introduction China has mandated that at least 50% of equipment used for new semiconductor capacity must be domestically sourced. This move is designed to squeeze foreign suppliers out of the supply chain. ## Technical Context Semiconductor production requires sophisticated tools, such as lithography machines. However, China is unable to produce these machines in sufficient quantities and therefore allows the use of foreign alternatives. ## Implications This decree may have significant implications for semiconductor companies operating in China. They may be forced to use domestic equipment, which could increase costs and reduce their competitiveness on the international market. ## Conclusion China's decision to require at least 50% of equipment used for new semiconductor capacity to be domestically sourced is a significant step in its efforts to reduce dependence on imports and increase economic sovereignty.