Market and Technology Trends

Mainland China Semiconductor Equipment Industry 2026

May 2026

China's semiconductor equipment market expands as localization rises. Future: narrowing import gap, advancing toward self-sufficiency.

YINTR26571

Key Features

China's semiconductor equipment market grew fast from 2021 to 2025, driven by local chipmakers' capex and government support. China semiconductor equipment market will continue strong. growth. Localization accelerates across etch, deposition, CMP. Lithography remains dependent on global suppliers. Self-reliance push persists.
Domestic semiconductor equipment suppliers like NAURA, AMEC, Piotech, and Hwatsing gained share, raising the overall localization rate in deposition, etch & clean, CMP and thinning sections. However, lithography and high-end metrology & inspection tools still depend on foreign vendors. US export controls continue to push China toward self-reliance.

China's semiconductor equipment industry is seeing rapid localization in etch, deposition, and CMP. Technology trends include high-aspect-ratio etch for 3D NAND and HBM, advanced ALD and epitaxy, high-energy ion implant, hybrid bonding, high-end CMP, copper electroplating, and HBM/AI testers. Lithography and M&I remain dominated by foreign suppliers, but self-reliance is accelerating.

What’s new

Non-Chinese industry participants face significant information asymmetry regarding the actual conditions of China's semiconductor industry
A high degree of uncertainty over the future evolution of China's semiconductor equipment market segments and localization rates.
Future competitive opportunities in China's semiconductor equipment market
Some global leading companies are currently or may soon face the risk of losing substantial market share in China.
The rapid emergence of numerous Chinese semiconductor equipment start-ups is introducing significant market uncertainty.

Report’s objectives

As capital expenditures by China’s domestic chipmakers continue to surge — driven by aggressive fab expansion, supply chain localization, and the push for self-reliance — Yole takes a deep dive into this dynamic landscape with this new report. The report tracks how Chinese semiconductor equipment suppliers are rapidly gaining ground, particularly in mature-node and specialty process segments such as etching, deposition, CMP, and cleaning. With local fabs prioritizing domestic tools to mitigate geopolitical risks and secure capacity, Yole’s analysis highlights the accelerating shift from import dependence to homegrown competitiveness, positioning China’s equipment industry as a rising force in the global semiconductor supply chain.

Evaluate the impact of government policies, National Big Fund, and STAR Market on equipment industry growth
Review capital expenditure trends of major Chinese chipmakers (SMIC, YMTC, CXMT, Huahong, etc.)
Analyze the effect of US export controls on equipment supply and China's self-reliance push
Assess stockpiling behavior and its implications for foreign suppliers
Identify emerging opportunities in high-aspect-ratio etch, ALD, hybrid bonding, and HBM testers
Analyze China semiconductor equipment market dynamics from 2021 to 2030
Provide annual market sizing by equipment type (lithography, etch, deposition, CMP, metrology, etc.)
Assess domestic vs. foreign vendor market shares and localization rates
Highlight leading domestic equipment suppliers (NAURA, Piotech, Hwatsing, AMEC, Kingsemi, etc.)
Summarize technology gaps and localization roadmaps by equipment category

China Semiconductor Capex, Equipment Market & Imports

China's domestic chipmakers have significantly increased capital expenditures, driven by fab expansion and the push for self-reliance. This has led to rapid growth in China's semiconductor equipment market, as fabs demand more tools for etching, deposition, CMP, and metrology. However, equipment imports remain substantial, particularly for advanced categories like lithography, high-end metrology, and ion implantation, where foreign suppliers still dominate.

The gap between total market size and import value is gradually narrowing, as domestic suppliers gain share in mature-node and specialty segments such as etching, deposition, cleaning, and CMP. Nonetheless, imports still account for the majority of the market, especially in leading-edge applications. The push for localization, combined with external trade restrictions, continues to reshape this dynamic — domestic substitution is accelerating in certain key equipment categories, while advanced tools remain largely import-dependent.

We estimate that the total China semiconductor equipment market grew from $30.0 billion in 2021 to $46.7 billion in 2025, with a 11.70% CAGR.

China semiconductor wafer fab equipment market

China's semiconductor equipment market has shifted across categories, reflecting capacity expansion and technology priorities. Deposition and lithography remain large segments, though lithography is still foreign-dominated. Dry etch and clean equipment has grown steadily, while wet etch and clean has expanded due to more cleaning steps. Metrology and inspection has grown significantly as process control tightens for 3D NAND, advanced packaging, and HBM. CMP and thinning tools have seen consistent growth from planarization needs. Smaller segments like ion implant, resist processing, and wafer bonding have also expanded. Ion implant remains challenging, while wafer bonding gains attention from hybrid bonding in advanced packaging. Overall, mature-node and specialty equipment have grown healthily, but advanced tools like lithography and high-end metrology remain import-dependent. Domestic suppliers are gaining share in deposition, etch, CMP, and some packaging tools, but overall import reliance remains high, especially for leading-edge manufacturing.

Chinese companies have performed exceptionally well in the localization of deposition, etch and clean, and CMP and thinning equipment, achieving localization rates of over 30% in 2025. In ion implantation, resist processing, and metrology & inspection equipment, Chinese companies have made notable progress, but still lag behind leading global players, with localization rates of around 12% in 2025. In lithography equipment, Chinese companies remain focused on the advanced packaging market, with a localization rate of less than 5% in 2025.

China Semiconductor equipment localization rate

China's semiconductor equipment localization rates vary significantly by equipment category. CMP and thinning equipment leads with the fastest progress, driven by Hwatsing. Deposition and dry etch & clean equipment have also seen substantial localization gains, supported by companies like NAURA, AMEC and Piotech. Wet etch and clean equipment shows steady improvement.

However, several categories remain challenging. Lithography equipment has the lowest localization rate, reflecting the continued dominance of ASML. Metrology and inspection, ion implant, and resist processing equipment all lag behind, with limited domestic market share.

Overall, China's total equipment localization rate has steadily increased, with faster progress in mature-node and specialty segments. While domestic suppliers are gaining share in CMP, deposition, and etch & clean, advanced categories like lithography and high-end metrology remain heavily dependent on foreign suppliers. The gap is narrowing in some areas but remains wide in others, especially for leading-edge manufacturing applications.

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