Taiwan's homegrown chip equipment industry is stepping up, with TSMC teaming up with local toolmaker Hong Hong Technology on advanced manufacturing research — good news for Taiwan's chip supply chain.

• Hong Hong Technology opened a new advanced process lab in Taiwan, with TSMC attending as a partner.
• The two will work together on coating equipment, thin-film quality, and screening the special chemicals used to make chips.
• The goal is better uniformity and yield on next-generation wafers, meaning fewer bad chips.
• Hong Hong says Taiwan's equipment makers can now be innovators, not just followers of foreign toolmakers, and plans to spend more on research at home.

Outlook: Expect more local equipment development in Taiwan as the country tries to build chip tools domestically instead of importing them.