Bernstein: China's Domestic Semiconductor Equipment Manufacturing Rate Rises to 21%
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Bernstein's latest WFE report shows China's domestic equipment share climbed from 16% to 21% in 2025, with Chinese demand hitting $50 billion — 41% of the global total. This means → localization is no longer aspirational; it is a measurable, multi-year share migration still far from its ceiling.
How big is the market, and how far has localization come?
China's wafer fabrication equipment (WFE — the full suite of machines needed to make chips) demand reached $50 billion in 2025, accounting for 41% of the $122 billion global total.
The domestic equipment share rose from 16% in 2024 to 21% in 2025. Bernstein projects 26% for 2026.
This means → local vendors are clawing back roughly 5 percentage points a year, and the runway stretches well beyond 2026.
Which segments are breaking through — and which are still stuck?
The two fastest-moving segments: dry etch (using plasma to carve circuit patterns on a chip) reached 31% localization; thin-film deposition (coating chip surfaces with nanometer-thin layers) hit 27%. Local vendors grew 37% and 67% year-on-year, respectively.
Ion implantation and process control crossed 10% self-sufficiency for the first time, reaching 13% and 10%, with local vendor growth of 86% and 63%. In plain terms = these segments went from near-total import dependence to having real domestic alternatives.
Still bottlenecked: lithography and coater/developer localization remains in the low single digits. Cleaning equipment growth was a surprise laggard at just 8% year-on-year.
What cards are China's top three equipment makers playing?
NAURA Technology: the broadest product portfolio — thin-film deposition, etch, thermal processing, cleaning. Its deposition share edged up from 64% to 65%; etch held steady at 48%; and in its first year booking ion-implant revenue it already captured 27% of that segment.
AMEC (Advanced Micro-Fabrication Equipment): widely regarded as having the strongest etch technology domestically, holding a stable 47% share. Deposition rose from 1% to 3% as the company builds a second growth curve.
Piotech: focused on thin-film deposition, extending into hybrid bonding equipment — a process that joins two chips directly face-to-face — for advanced packaging. Strong innovation track record, though its share dipped slightly due to revenue-recognition timing.
How are global equipment giants faring in China?
Most global vendors saw China growth slow in 2025: TEL declined 20% year-on-year; AMAT fell 12%.
The sole exception was Lam Research, up 36%. This means → not every foreign player is losing ground — Lam has a higher share in advanced logic, which is exactly where 2025's incremental demand landed.
ASML and KLA saw high-single-digit year-on-year revenue declines in China. This reflects pull-forward buying in prior years now normalizing.
How does Bernstein value the top three?
Bernstein maintains Outperform ratings on all three: NAURA at RMB 680, AMEC at RMB 500, Piotech at RMB 580.
The core thesis: domestic memory clients are sharply raising capex plans amid a memory super-cycle, while surging AI chip demand is accelerating advanced-logic expansion.
In plain terms = downstream customers need to expand both memory and AI chip capacity at the same time — that double tailwind gives equipment makers unusually high order visibility. Bernstein calls the localization trend irreversible and sees share gains as a multi-year theme.
Content is for reference only, not financial advice.