China's Chip Equipment Makers Accelerate M&A as Domestic Substitution Share Targets 43%
0xBroomberg
Piotech (拓荆科技) halted trading to acquire SJI-Semi, filling a gap in etch equipment; in the same week AMEC and Hwatsing also moved — China's domestic equipment share has risen from 4% in 2017 to 21% in 2025, with industry estimates pointing to roughly 43% by around 2028.
Why is Piotech buying SJI-Semi?
Piotech (拓荆科技) — a listed maker of thin-film deposition tools — halted its shares and plans to acquire a controlling stake in SJI-Semi (盛吉盛) via share issuance plus cash, raising supporting funds at the same time.
SJI-Semi makes PVD (physical vapor deposition — coating wafers with metal films), etch, and CVD (chemical vapor deposition) equipment — exactly the gaps in Piotech's product line.
This means → Piotech wants to move from "deposition only" to a combined deposition-plus-etch platform. In plain terms = it used to sell machines for one process step; now it wants to cover the adjacent steps too.
Where are the risks?
Analysts flag three risks: acquisition valuation, integration difficulty, and goodwill impairment.
Piotech's stock has already climbed more than 150% this year, and it just completed a ¥4.6 billion private placement. This means → if integration falls short, both goodwill and the share price face pressure.
This reflects a broader dynamic: the heat around domestic equipment substitution is inflating asset prices, and buyers must pay a "sector premium."
Is the whole industry expanding, not just Piotech?
In the last week of June alone: AMEC (中微公司) closed its acquisition of CMP (chemical-mechanical polishing — the step that grinds wafer surfaces flat) equipment maker Sizone (盛美半导体); Hwatsing Technology (华海清科) locked in a ¥37.95 billion financing plan to build a new R&D and manufacturing base in Shanghai.
Three forces are driving expansion at once: CXMT and YMTC accelerating fab build-outs, AI infrastructure investment lifting demand for both advanced and mature nodes, and domestic tools winning volume orders after years of qualification.
In plain terms = downstream fabs need more production lines and are now willing to use domestic machines — equipment makers have both demand pull and a substitution window, so everyone is scaling up.
How far has domestic substitution actually come?
China-made equipment's share of the domestic wafer-fab equipment market: ~4% in 2017 → ~16% in 2024 → ~21% in 2025.
Industry estimates suggest the share could reach roughly 43% by around 2028 if the substitution trend continues.
This means → the share needs to roughly double in three years. Whether that happens depends on two variables: the pace of CXMT and YMTC's capacity ramps, and how quickly new tools pass qualification on volume production lines.
Content is for reference only, not financial advice.