On October 15 and 16, 2026, three of China's largest semiconductor equipment companies announced deals in the same forty-eight hours. NAURA agreed to acquire 100 percent of Nuohe Jianwei, a hybrid bonding equipment developer, for 405 million yuan in cash. AMEC announced a 35 million yuan investment in Qinghe Jingyuan, another bonding specialist. Tuojing Technology disclosed a parallel acquisition valued at 2.5 billion yuan — far larger than the other two combined.
The three companies are competitors. The fact that they moved in the same week, in the same technology category, is a signal about where the next phase of China's equipment localization is headed.
Hybrid bonding is the process that stacks chips directly, copper pad to copper pad, without solder bumps. It is the enabling technology for advanced packaging, 3D stacking, and the chiplet architectures that AI accelerators increasingly depend on. It is also a process where the equipment is only as good as its optical alignment, its motion control, and its bonding head — components that sit at the intersection of precision engineering and materials science.
The three deals suggest that the next fight is no longer about building the whole machine. It is about building the parts inside it.
What 35 Percent Actually Measures
In August 2026, China's National Development and Reform Commission confirmed that domestic equipment had reached 35 percent of all semiconductor manufacturing equipment installed in Chinese fabs in 2025, beating the government's target. The figure was up from 25 percent in 2024 and roughly 8 percent in 2021. The stated goal is 70 percent by 2027.
The trajectory is real. NAURA rose into the global top five equipment makers in 2025, according to industry rankings cited by EET-China, breaking into a top tier long dominated by ASML, Applied Materials, Lam Research, and Tokyo Electron. Three Chinese equipment makers now rank in the global top 20.
The 35 percent measures tool-level self-sufficiency — the share of the machines in a fab that were built by Chinese companies. It does not measure how much of each machine was built in China.
The Parts Inside
The localization rate for semiconductor components — the vacuum valves, RF power supplies, electrostatic chucks, mass flow controllers, and precision optical modules that make a tool function — stood at 7.1 percent in 2024, according to industry data. The forecast is 12.4 percent by 2029.
The breakdown by component category is stark.
Vacuum valves are dominated by Switzerland's VAT, which holds roughly 71 percent of the global market, with MKS and Japanese suppliers accounting for most of the remainder. The domestic localization rate is approximately below 1 percent. The valves must seal against corrosive gases, operate at extreme temperatures, and cycle millions of times without failure. The materials and manufacturing tolerances are the barrier, not the design.
RF power supplies are dominated by MKS and AE, which together hold about 87 percent of the global market. The domestic localization rate is approximately 1 to 5 percent. The power supply must deliver a stable, tunable radio-frequency signal into a plasma chamber, where the impedance changes continuously as the process runs. Matching that impedance in real time requires control electronics that Chinese suppliers have not yet matched at production scale.
Electrostatic chucks, which hold the wafer in place during processing, have a domestic localization rate below 5 percent. Mass flow controllers, which meter process gases with precision measured in parts per million, are also below 5 percent.
The aggregate figure for high-end automation components — the category that includes valves, power supplies, and precision motion systems — is over 70 percent imported. In mature-process tools, domestic components account for 40 to 50 percent of value; the remainder is imported. In advanced-process tools, the import share is higher.
The 35 percent figure is a measure of the shell. The 7.1 percent figure is a measure of what is inside it.
Why Hybrid Bonding Is the Next Test
The three deals in October respond to a specific technical problem.
Hybrid bonding requires aligning two wafers or dies to within a few hundred nanometers, pressing them together at elevated temperature and pressure, and forming a direct copper-to-copper bond across the interface. The equipment must control alignment, temperature uniformity, pressure distribution, and particle contamination simultaneously. A defect at the bonding interface is not repairable; it destroys both chips.
The components that determine whether the tool works — the optical alignment system, the compensation algorithm, the precision motion stage, the vibration isolation, the bonding head — are the components where Chinese suppliers have the least experience.
Nuohe Jianwei, the company NAURA is acquiring, was founded in 2025. It has developed optical alignment, compensation algorithms, precision motion control, vibration suppression, and bonding head design that the company says achieve nanometer-level alignment accuracy, with core specifications benchmarked against overseas leaders. It had no revenue in the first half of 2026, and its net profit was negative in both 2025 and the first half of 2026, according to its disclosure filings. NAURA is paying 405 million yuan for a pre-revenue company because the technology is the asset.
AMEC's investment in Qinghe Jingyuan is smaller — 35 million yuan — but it follows the same logic. Tuojing's acquisition, announced the same evening, follows the same pattern at a larger scale.
Three companies, three deals, one conclusion: the whole-tool phase of China's equipment localization is mature enough that the largest players are now buying their way into the component layer.
The Scale Paradox
NAURA's rise into the global top five illustrates the paradox at the center of China's equipment strategy.
The company now has the scale to invest in R&D, the customer relationships to validate new tools, and the balance sheet to acquire component technology. It is a genuine global competitor at the tool level.
But the tools it sells still depend on imported components. A NAURA etch system may be designed and assembled in China, but the vacuum valve that seals its chamber may come from VAT, and the RF power supply that drives its plasma may come from MKS. The tool-level localization rate is 35 percent. The component-level localization rate is 7.1 percent.
That gap reflects how the semiconductor supply chain evolved. Component suppliers like VAT and MKS spent decades building process knowledge, material science expertise, and customer qualification records that cannot be replicated by reverse-engineering a part. The valve is not just a valve. It is a valve that has been qualified for 10,000 hours of operation in a specific etch chemistry, with a documented failure rate and a service network that responds within hours.
Building that qualification record takes time. Buying a component company accelerates the process. That is what the three October deals are designed to do.
What the Component Gap Means
The 70 percent target for 2027 is a tool-level target. It does not require China to build 70 percent of the components inside those tools. A Chinese-built etch system with imported valves and RF supplies counts toward the 70 percent.
That is a deliberate sequencing choice. The tool-level target is achievable with imported components. The component-level target — 12.4 percent by 2029 — is much harder, because it requires materials science, precision manufacturing, and long qualification cycles that cannot be compressed by capital alone.
The component gap is also a chokepoint risk. If export controls were extended from tools to components, the 35 percent tool-level localization rate would not protect Chinese fabs. A domestically built tool that relies on a foreign valve is still dependent on the foreign valve. The shell can be domestic; the heart cannot.
The October deals are an attempt to close that gap at the technology level. Whether they succeed depends on whether the acquired technology can be qualified at production scale, in real fabs, over thousands of hours of operation.
NAURA is paying 405 million yuan for a company with no revenue. That is a bet on the technology, not the business. The bet is that the component layer is the next battleground, and that the companies that own the components will own the tools.
The 35 percent is the scoreboard. The 7.1 percent is the game.
Sources: TechTimes "China Chip Equipment Hits 35%; Vacuum Valves and RF Power Remain 80% Foreign" (August 29, 2026); Sina Finance "Domestic Semiconductor Equipment Breaks Through Faster" (September 16, 2026); Xiamen Taixing "Equipment Localization Rate Reaches 35 Percent, Components Only 7.1 Percent" (August 14, 2026); EET-China "Three Chinese Semiconductor Equipment Firms Enter Global Top 20, NAURA Climbs to Fifth" (February 24, 2026); EET-China "NAURA Enters Global Top 5 in Semiconductor Equipment" (February 14, 2026); Securities Times "NAURA Acquires Nuohe Jianwei for 405 Million Yuan" (October 15, 2026); Shanghai Securities News "AMEC Invests 35 Million Yuan in Qinghe Jingyuan" (October 12, 2026); 21st Century Business Herald "Tuojing Technology Acquires Wuxi Shangji for 2.5 Billion Yuan" (October 15, 2026); China.com.cn "Hybrid Bonding Equipment Localization Moves Into the Fast Lane" (October 17, 2026); SEMI China "NAURA Acquires 100 Percent of Nuohe Jianwei" (October 16, 2026); OFweek "Analysis: Hybrid Bonding Heats Up Again, and How the Three Domestic Giants Are Positioned" (October 27, 2026); Pedaily "Three Domestic Equipment Giants Add Bets on Hybrid Bonding" (October 17, 2026); Sina Finance "Semiconductor Components: An Upturn Plus Self-Sufficiency" (May 18, 2026); Fountyl "The Fight for Semiconductor Equipment Localization" (June 26, 2026); Sgpjbg "Key Categories in Semiconductor Components" (August 4, 2026); Baidu Baike "Semiconductor Components" (September 21, 2026); Jiuyangongshe "Expert Call Takeaways on Semiconductor Equipment Component Demand" (August 26, 2026).
Disclaimer
The information provided in this article is for general informational and educational purposes only. It does not constitute legal, financial, or professional advice. The author and publisher are not responsible for any actions taken based on the content of this article. Readers should consult qualified professionals for advice specific to their situation. All trademarks and references to third-party products, services, or organizations are the property of their respective owners. The performance data and benchmarks discussed are based on specific research studies and may not generalize to all use cases or environments. As of the publication date, the AI landscape continues to evolve rapidly, and readers should verify current information independently.
Limitations
The 35% localization figure measures spending share at Chinese fabs, not unit counts or technical capability.
Component-level localization rates are drawn from Chinese industry research with differing scopes and dates.
Acquisition values are reported as announced; none of the three deals had closed at the time of writing.
Global market shares for valve and RF suppliers come from industry summaries rather than audited filings.
Reporting standards differ between Chinese and Western outlets, and figures cited here reflect the primary sources as published.
Market size and shipment estimates vary by methodology; where estimates conflict, the source used is named in the text.
The sectors discussed are changing quickly, and some figures may be revised after publication.
Sources
- TechTimes "China Chip Equipment Hits 35%
- Vacuum Valves and RF Power Remain 80% Foreign" (August 29, 2026)
- Sina Finance "Domestic Semiconductor Equipment Breaks Through Faster" (September 16, 2026)
- Xiamen Taixing "Equipment Localization Rate Reaches 35 Percent, Components Only 7.1 Percent" (August 14, 2026)
- EET-China "Three Chinese Semiconductor Equipment Firms Enter Global Top 20, NAURA Climbs to Fifth" (February 24, 2026)
- EET-China "NAURA Enters Global Top 5 in Semiconductor Equipment" (February 14, 2026)
- Securities Times "NAURA Acquires Nuohe Jianwei for 405 Million Yuan" (October 15, 2026)
- Shanghai Securities News "AMEC Invests 35 Million Yuan in Qinghe Jingyuan" (October 12, 2026)
- 21st Century Business Herald "Tuojing Technology Acquires Wuxi Shangji for 2.5 Billion Yuan" (October 15, 2026)
- China.com.cn "Hybrid Bonding Equipment Localization Moves Into the Fast Lane" (October 17, 2026)
- SEMI China "NAURA Acquires 100 Percent of Nuohe Jianwei" (October 16, 2026)
- OFweek "Analysis: Hybrid Bonding Heats Up Again, and How the Three Domestic Giants Are Positioned" (October 27, 2026)
- Pedaily "Three Domestic Equipment Giants Add Bets on Hybrid Bonding" (October 17, 2026)
- Sina Finance "Semiconductor Components: An Upturn Plus Self-Sufficiency" (May 18, 2026)
- Fountyl "The Fight for Semiconductor Equipment Localization" (June 26, 2026)
- Sgpjbg "Key Categories in Semiconductor Components" (August 4, 2026)
- Baidu Baike "Semiconductor Components" (September 21, 2026)
- Jiuyangongshe "Expert Call Takeaways on Semiconductor Equipment Component Demand" (August 26, 2026).
The information provided in this article is for general informational and educational purposes only. It does not constitute legal, financial, or professional advice. The author and publisher are not responsible for any actions taken based on the content of this article. Readers should consult qualified professionals for advice specific to their situation. All trademarks and references to third-party products, services, or organizations are the property of their respective owners. The performance data and benchmarks discussed are based on specific research studies and may not generalize to all use cases or environments. As of the publication date, the AI landscape continues to evolve rapidly, and readers should verify current information independently.
Limitations: The 35% localization figure measures spending share at Chinese fabs, not unit counts or technical capability.; Component-level localization rates are drawn from Chinese industry research with differing scopes and dates.; Acquisition values are reported as announced; none of the three deals had closed at the time of writing.; Global market shares for valve and RF suppliers come from industry summaries rather than audited filings.; Reporting standards differ between Chinese and Western outlets, and figures cited here reflect the primary sources as published.; Market size and shipment estimates vary by methodology; where estimates conflict, the source used is named in the text.; The sectors discussed are changing quickly, and some figures may be revised after publication.