SINGAPORE - China is requiring chipmakers to use at least 50 per cent domestically made equipment for adding new capacity, three people familiar with the matter said, as Beijing pushes to build a self-sufficient semiconductor supply chain.

The rule is not publicly documented, but chipmakers seeking state approval to build or expand their plants have been told by authorities in recent months that they must prove through procurement tenders that at least half their equipment will be Chinese-made, the people told Reuters.

The mandate is one of the most significant measures Beijing has introduced to wean itself off reliance on foreign technology, a push that gathered pace after the US tightened technology export restrictions in 2023, banning sales of advanced AI chips and semiconductor equipment to China.

While those US export restrictions blocked the sale of some of the most advanced tools, the 50 per cent rule is leading Chinese manufacturers to choose domestic suppliers even in areas where foreign equipment from the US, Japan, South Korea and Europe remain available.

Applications failing the threshold are typically rejected, though authorities grant flexibility depending on supply constraints, the people said. The requirements are relaxed for advanced chip production lines, where domestically developed equipment is not yet fully available.