India, Aug. 11 -- The longer-term risk is that domestic lithography completes an equipment supply chain already shifting deposition, etch, cleaning, and CMP orders to Chinese suppliers - and CXMT's own fabs show how far that shift has already gone.

China has directed semiconductor manufacturers to use at least 50% domestically produced equipment when adding new capacity, according to a Reuters report citing people familiar with the policy. Fab projects that fail to meet that threshold are generally denied regulatory approval, although flexibility remains where no suitable Chinese tool is available.

The requirement favors domestic equipment suppliers, such as Naura Technology and AMEC over foreign companies, and provides the context need...