Published on Jan. 15, 2026

Chinese manufacturers of semiconductor equipment are benefiting from the AI boom.

Not only is overall global market spend rising in absolute terms, with China already holding the biggest share of that consumption. China’s relative share of total equipment sales is also expanding.

With the figures just out for the third quarter of 2025, sales of equipment to manufacture semiconductors in China have risen by 13 percent to US$ 14.56 billion, raising China's share of global equipment spending to 43 percent, reports the Chinese electronics paper Zhongguo Dianzibao (in Chinese).

This means that mainland China has remained the world’s largest semiconductor equipment market for a tenth consecutive quarter. It is good news for both international and Chinese manufacturers of semiconductor equipment, all relying on steady growth in this market to varying degrees.

While investments related to AI are expected to keep on lifting semiconductor equipment sales globally, continued strong growth in China is especially good news for certain segments.

Take wafer fab equipment (WFE) as an example. It includes wafer processing, mask/reticle, and fab‑facilities equipment.

The global industry association SEMI writes that the "continued capacity build-out in China is contributing meaningfully to WFE demand". Stronger‑than‑expected investments in DRAM and high‑bandwidth memory (HBM) are part of the reasonfor projected overall growth of 11.0 percent for the full year 2025.

While continued, healthy demand in China helps to maintain steady growth in an otherwise volatile and highly cyclical industry for everybody, the AI boom also has unexpected results.

AI-driven growth is accelerating the breakthrough of domestic Chinese manufacturers into their home market and into global markets.

The "local substitution", meaning Chinese companies taking over market share from foreign manufacturers, remains a highly uneven process.

China's own semiconductor equipment industry displays highly different degrees of self-sufficiency across different subsegments, with relative strength in mature process nodes, and continued, only slowly receding weakness in advanced process nodes.

In photoresist stripping equipment, for example, the self‑sufficiency rate in the low‑ to mid‑range market has reached 75 percent or more, mainly for mature processes, power semiconductors, and advanced packaging.

In high‑end photoresist stripping, however, for example equipment used for 3D NAND and DRAM, the same rate remains below 30 percent.

That said, the rise of Chinese manufacturers continues, and it is now being accelerated by the AI boom that is “lifting all boats”.

"AI-driven growth accelerates the breakthrough of domestic semiconductor equipment manufacturers", writes Zhongguo Dianzibao.

A recent showcase for a rapidly growing domestic supplier in China is AMEC or „Advanced Micro-Fabrication Equipment“ in Shanghai. Its CCP etching equipment has successfully entered advanced‑node supply chains.

Sixty‑to‑one ultra‑high‑aspect‑ratio dielectric etching systems manufactured by the company have become standard tools, with mass-production metrics steadily improving. The next‑generation system is already on the way.

Beijing-based NAURA Technology’s deep-silicon etching equipment has achieved batch deployment in advanced logic manufacturing. The company reported revenue growth of more than 34 percent in Q3, 2025.

The trend that packaging is becoming more and more important for manufacturing the high‑end chips needed for AI applications is also creating a positive tailwind for Chinese companies.

JCET (Changdian Keji), the largest OSAT player from China, saw its revenue from advanced packaging increase by 45 percent year on year as of the third quarter.

The company has started to sell chiplet‑related packaging services to leading global GPU vendors. AI-computing chip packaging orders have risen by 120 percent year on year.

This is, again, a global trend. As Moore’s Law is slowly coming to an end, demand for back‑end packaging and testing equipment is on the rise everywhere. For Chinese companies, however, this new trend presents an opportunity to leapfrog.

With AI increasing complexity demands across the industry, new entrants into the packaging and testing market have been handed a historic chance for growth.

"AI is the best gift bestowed upon China’s semiconductor industry at precisely the right moment", the semiconductor research institution Xinmou Yanjiu writes.

It sees an "AI dividend" benefitting Chinese companies that had little chance to challenge global incumbents in traditional chip domains but can now break into supply chains that are being reshaped by AI‑related technology shifts.

AI, the Shanghai-based research institute believes, is creating a powerful tailwind for China's semiconductor equipment industry.