Axcelis Technologies’ proposed acquisition of Veeco Instruments is being subjected to a careful and cautious merger review in China and is possibly facing third party concerns, according to a source familiar with the matter.

China’s merger control regulator, the State Administration for Market Regulation (SAMR), placed the USD 4.4bn all-stock transaction under its simplified procedure on 23 January 2026. The 10-day public comment period ran until 1 February, according to the agency’s announcement.

SAMR’s average merger review duration for simple cases was 18.2 days (from acceptance to conclusion) in 2025, according to a SAMR press release.

But as of 17 March, there was no indication in SAMR’s weekly accounting of unconditional clearances that SAMR approved the deal.

As reported by this news service, SAMR recently adopted a cautious approach in its handling of merger reviews involving US companies, pending US President Donald Trump’s visit to China and greater clarity on the status of Sino-US relations.

As for this deal, which involves US companies in the sensitive semiconductor sector, SAMR is reluctant to conclude the review expeditiously, according to the source.

The agency is still in the process of collecting comments from industry players in China, the source added, and the deal may encounter third party concerns.

A second source familiar told this news service, prior to SAMR’s simple case acceptance of the deal, that the agency has sent deal parties “plenty” of requests for information covering various aspects of the deal – a move which slowed the agency’s acceptance process at that time.

SAMR’s average acceptance period for simple cases (from filing to acceptance including time for supplementary materials) was 15.4 days in 2025. The Veeco deal was filed with SAMR under the simplified procedure in late November, according to this news service’s report in December. The acceptance occurred in late January, implying it took almost two months for SAMR to accept the matter for review under the simplified procedure.

According to the second source, before acceptance, SAMR mulled the idea of requiring the deal to be filed under the normal procedure as the agency knew third party complaints may arise. But the deal parties appeared to oppose the transfer. Given that the market share data of the deal fall well within simple case thresholds, the agency eventually accepted the deal in that category, waiting to see if any third-party complaints cropped up during the public comment period, according to the second source.

SAMR’s acceptance showed that, in the agency’s estimation, neither deal party operates in a common relevant market, nor do they share upstream or downstream business links. SAMR will review the deal in two relevant markets: (1) the global and Chinese markets for ion implantation devices, in each of which Axcelis held a 20%-25% share in 2024; (2) the global and Chinese markets for heat processing equipment, in which Veeco held a share of 5%-10% and 10%-15%, respectively, in 2024.

According to a third source familiar with China’s semicon industry policymaking, domestic Chinese companies already boasted ample capabilities in the relevant segments, limiting the competitive impact of the merger. Even so, complaints would not be unexpected, given the strained state of Sino-US relations and the strategic importance of semicon equipment in general, the third source said.

It is unclear at present whether the deal has been moved from simplified to normal procedure, according to the first source.

The transaction has an outside date of 30 September 2026, which can be automatically extended if antitrust approvals remain the only outstanding condition. The parties expect the deal to close in the second half of 2026.

So far, Axcelis and Veeco have waived Swedish investment screening, obtained antitrust clearance in the US, Ireland, and the UK, as well as FDI clearance in Germany. SAMR’s nod is the only outstanding regulatory approval for the deal to complete. Shareholders of Axcelis and Veeco approved the transaction on 6 February.

Axcelis and Veeco did not respond to requests for comment. SAMR does not comment on ongoing cases.