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According to the Semiconductor Equipment and Materials International (SEMI), China’s spending on chip manufacturing equipment reached USD 25 billion in the first half of this year, surpassing the combined total of Korea, Taiwan, and the US. Despite escalating tech tensions between China and the US, China’s investment in chip equipment has remained strong, with July's spending suggesting a potential new annual record of USD 50 billion by the end of the year.

China's accelerated import of chip manufacturing equipment, particularly from Dutch company ASML and Japanese company Tokyo Electron (TEL), is seen as a strategic move to counter potential US sanctions. Although US restrictions have prevented China from acquiring advanced EUV lithography equipment from ASML, the Chinese market continues to be a major revenue driver for global chip equipment suppliers. The latest quarterly financial reports from Applied Materials, Lam Research, and KLA reveal that approximately 40% of their revenue comes from China, with TEL and ASML reporting nearly half of their revenue from the Chinese market.

According to SEMI's senior director of market intelligence, Clark Tseng, more than 10 tier-two chip manufacturers in China are actively purchasing new equipment, contributing to the surge in spending. Tseng also projected that China will become the largest investor in new fab construction, including equipment purchases, though he noted that spending on new plant construction in China is expected to "normalize" over the next two years.

Trade data from China’s General Administration of Customs further supports this trend, showing that from January to July, Chinese companies imported nearly USD 26 billion worth of chip manufacturing equipment, surpassing the previous record set in the same period in 2021. Despite a global economic slowdown, China remains the only region where chip manufacturing equipment spending has continued to increase this year.

Editor：Lulu

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