NEW YORK, December 30, 2025, 17:52 ET — After-hours
- Lam Research shares fell about 1.2% to $173.78, tracking declines in U.S. chip-equipment peers Applied Materials and KLA.
- A Reuters report said China is requiring chipmakers to source at least 50% of equipment domestically for new capacity approvals.
- Investors are watching for implementation details and whether waivers hold for advanced production lines.
Lam Research shares were last down 1.2% at $173.78 in after-hours trading on Tuesday, after ranging between $173.51 and $177.26 in the regular session. Applied Materials fell 1.2% and KLA slipped 1.3%, while Dutch rival ASML rose about 0.6%.
The move followed a Reuters report that China is requiring chipmakers to use at least 50% domestically made equipment when building or expanding capacity — a shift that could squeeze foreign tool suppliers. The report said the policy is being enforced through procurement tenders tied to state approvals and is already nudging fabs — semiconductor fabrication plants — toward local suppliers in processes where Lam has been a key provider.
Why it matters now: Lam sits at the center of chipmakers’ capital spending cycles, and China’s self-sufficiency drive targets the same budgets that fund new tools and upgrades. A higher domestic-content bar would raise the risk of market-share erosion in China even where foreign tools remain available.
The policy pressure also lands as Washington tightens and reshapes its own export-control framework around shipments of chipmaking tools into China. Reuters reported earlier on Tuesday that the U.S. approved annual licenses for 2026 allowing Samsung Electronics and SK Hynix to bring chipmaking equipment into their China facilities, replacing broader exemptions that expire on Dec. 31.
Lam sells wafer fabrication equipment — chipmaking tools used to build chips on silicon wafers — including etching systems. Etching removes material from the wafer to carve microscopic circuit patterns.
The stock has now fallen for a second straight session and is about 3.35% below its recent 52-week high of $179.80 set on Dec. 26, MarketWatch data showed. Trading volume was about 5.7 million shares, below its 50-day average of 10.9 million, as the S&P 500 and Dow ended modestly lower.
Investors’ next question is how rigid the 50% threshold becomes in practice. The Reuters report said authorities can allow flexibility where domestic alternatives are constrained, particularly for more advanced production lines.
For Lam, the timing matters because equipment demand is driven by new capacity adds and technology upgrades — exactly where procurement rules bite first. Any acceleration in local substitution would likely show up in order mix and service activity tied to China-based fabs.
Lam’s exposure is heavily international: non-U.S. sales accounted for roughly 93% of revenue in fiscal 2025, a filing showed. That makes policy and spending decisions outside the United States a first-order driver for the stock.
Before the next session, investors will be looking for any additional signals from Beijing on how the rule is applied, and whether other countries’ export rules further reshape what tools can be shipped — and serviced — into China’s fabs.
