Recently, the first domestically produced commercial electron beam lithography machine “Xi Zhi” has announced application testing, which has excited the industry.
2025 is a year of frequent developments in China’s semiconductor equipment sector. Capital influx, technological breakthroughs, and new players entering the market.
At the beginning of the year, the National Integrated Circuit Industry Investment Fund Phase III invested 710 billion yuan in the Guotou Jixin and Huaxin Dingxin funds, and 930 billion yuan, focusing on supporting wafer manufacturing, equipment materials, and AI related fields. According to the plan, the fund will promote the localization of key processes such as lithography machines and photoresists, and increase investment in advanced packaging and HBM memory technologies.
Subsequently, the semiconductor equipment industry welcomed a series of expansion and production increase announcements.
In March, Zhongwei Company (688012) announced plans to invest in Chengdu High-tech Zone to establish a wholly-owned subsidiary, Zhongwei Semiconductor Equipment (Chengdu) Co., Ltd., to build a research and development and production base as well as a Southwest headquarters project. Zhongwei will invest approximately 3.05 billion yuan from 2025 to 2030 for the construction of a research center, manufacturing base, office space, and supporting facilities, equipped with advanced automated production lines and high-precision testing equipment to meet mass production needs.
In June, Tuo Jing Technology (688072) announced that the construction of its high-end semiconductor equipment industrialization base has officially begun and is progressing steadily as planned. Tuo Jing Technology’s subsidiary, Tuo Jing Jian Ke (Haining) Semiconductor Equipment Co., Ltd., is planning a new R&D and industrialization base.
In the same month, testing equipment leader Changchuan Technology (300604) announced plans to issue stocks to specific targets to raise 3.132 billion yuan, of which 2.192 billion yuan will be used for the R&D of semiconductor testing machines and AOI equipment. This financing scale is the largest since Changchuan Technology’s listing, aimed at accelerating the localization process of high-end testing equipment.
01Semiconductor Investment Growing Against the Trend
Capital is ruthless yet astute. According to the latest statistics from CINNO Research, in the first half of 2025, the total investment in China’s semiconductor industry (including Taiwan) was 455 billion yuan, a year-on-year decline of 9.8%, but among them, investment in semiconductor equipment grew against the trend by 53.4%, becoming the only sector to achieve positive growth.
In the second half of the year, investment news in the semiconductor equipment sector continues to be frequently released.
In July, domestic semiconductor equipment company Yitang Semiconductor officially listed on the Sci-Tech Innovation Board, raising 2.497 billion yuan, which will be focused on the R&D of advanced etching equipment for 14nm and below processes, industrialization of high-end thin film deposition equipment, and the construction of a global service center. Yitang Semiconductor’s clients include major domestic wafer fabs such as SMIC, Yangtze Memory, and Changxin Memory. Its self-developed 14nm etching equipment has passed client validation.
In the same month, Zhongdao Optoelectronics announced the completion of nearly 100 million yuan in a new round of financing, with funds focused on the R&D of display panels and semiconductor technologies and products, expanding its high-performance semiconductor product family. A month later, on August 7, Zhongdao Optoelectronics filed for guidance registration with the Guangdong Securities Regulatory Bureau, officially starting the A-share listing process.
On August 1, Pulian Technology’s first self-designed and developed PL-SR series inkjet stepper nano-imprinting equipment successfully passed acceptance and was delivered to domestic specialty process customers. According to official information, this is China’s first semiconductor-grade stepper nano-imprinting lithography system, overcoming key technical challenges such as non-vacuum full adhesion of stepper hard plates, glue spraying and thin glue imprinting, and control of imprint glue residual layers, suitable for nano-imprinting lithography processes with line widths <10nm.
On August 4, the electric vehicle listing company in Shenzhen, Guangdong, Lvtong Technology, announced plans to acquire 51% of Jiangsu Damo Semiconductor Technology Co., Ltd. (referred to as “Jiangsu Damo”) through equity transfer payments and capital increase, with a total transaction price of 530.4 million yuan.
Jiangsu Damo is a supplier of semiconductor front-end measurement equipment solutions, established in April 2017. Its equipment and technical services cover mainstream categories such as critical dimension scanning electron microscopes, bright field defect detection equipment, dark field defect detection equipment, particle counters, film thickness gauges, overlay measurement tools, and defect analysis scanning electron microscopes, applicable to 6 to 12-inch wafer production lines, supporting up to 14nm process technology, with some self-developed equipment already in the customer validation stage.
One reason for the high price paid by an electric vehicle company is that Jiangsu Damo has entered the supply chains of global leaders such as SMIC, TSMC, and GlobalFoundries.
On August 6, Xinkong Yuze completed its angel round financing, focusing on semiconductor equipment manufacturing. Xinkong Yuze is a company specializing in the manufacturing of semiconductor device-specific equipment, with this round of investment jointly participated by Suining Industrial Investment and Xiandao Rare Materials.
On August 6, Lihexing (301013.SZ) disclosed a plan to issue stocks to specific targets through a simplified procedure for the fiscal year 2025, stating that the total amount of funds raised (including issuance costs) will not exceed 16.75 million yuan (including principal), with the net amount after deducting issuance costs to be used entirely for the R&D and industrialization projects of precision components for semiconductor equipment and to supplement working capital.
022025: A Breakthrough Year for China’s Semiconductor Equipment
Looking back at the history of China’s semiconductor equipment development years later,2025 will be a special year, with domestic manufacturers making breakthroughs in various tracks.
At the SEMICON China 2025 in March, many semiconductor equipment companies launched new products.
Shenzhen Xinkailai Industrial Machinery Co., Ltd. made its debut, launching 31 types of semiconductor equipment across 6 categories. 18 types of semiconductor process equipment, covering etching, thin film, and diffusion equipment; 13 types of measurement equipment, covering optical detection, optical measurement, PX measurement, power measurement, etc.
North Huachuang announced its entry into the ion implantation equipment market and released its first ion implanter, Sirius MC 313. Zhongwei Semiconductor Equipment launched its self-developed 12-inch wafer edge etching equipment Primo Halona.
Tuo Jing Technology released new products in the ALD series. Tuo Jing Technology focused on launching the ALD series, 3D-IC, and advanced packaging series (low-stress fusion bonding equipment, chip-to-wafer hybrid bonding, laser lift-off equipment, and bonding alignment accuracy measurement equipment), as well as new products in the CVD series at SEMICON China 2025.
The reason why investment in China’s semiconductor equipment can rise against the global trend is driven by multiple factors. In the long term, the ongoing technological blockade and export controls from the United States, while putting immense pressure on China’s semiconductor industry, have unexpectedly activated the determination for domestic innovation. For example, the U.S. Department of Commerce, through the Bureau of Industry and Security (BIS), has pressured international equipment giants such as ASML, Applied Materials, and Lam Research, strictly limiting the export of key equipment such as high-end lithography machines to China, leading to frequent obstacles in the introduction of advanced process equipment.
In the face of this situation, China’s semiconductor industry may have no choice but to “overcome difficulties one by one.”
In terms of policy, the National Integrated Circuit Industry Investment Fund (the Big Fund) continues to play a leading role, focusing on supporting local equipment companies and promoting the R&D and industrialization of core technologies. Local governments are also actively following up, with cities like Shanghai, Beijing, and Shenzhen successively launching special funds, tax reductions, R&D subsidies, and a series of preferential measures, collectively building a favorable policy environment for the growth of semiconductor equipment, providing solid support for industry investment growth from funding to systems.
03Driving Forces Behind the Expansion of the Semiconductor Equipment Industry
It is encouraging that the semiconductor equipment industry has accumulated profitability through continuous progress.
In 2024, North Huachuang achieved a net profit of 5.6 billion yuan, becoming the “profit king” of the A-share semiconductor industry, a performance that not only highlights the strong performance of the company itself but also reflects the development of China’s semiconductor equipment industry. Driven by both policy support and market demand, leading domestic equipment companies have entered a virtuous development track.
Currently, the localization of semiconductor equipment still has broad space, with companies continuing to exert efforts through differentiated competition, and domestic substitution remains the core logic for the industry’s advancement. At the beginning of 2024, SEMI predicted that capital expenditure (Capex) in mainland China’s semiconductor industry would be approximately 220 billion yuan, but the actual amount reached 300 billion yuan, exceeding expectations by about 30%. This growth was mainly driven by geopolitical factors, as wafer fabs actively stocked overseas equipment before the export restrictions took effect, leading to an overall increase in investment. Among them, domestic equipment manufacturers secured orders of about 60 billion yuan, accounting for 20% of the total.
According to SEMI’s forecast, domestic semiconductor capital expenditure is expected to reach approximately 280 billion yuan in 2025. Domestic equipment manufacturers are expected to achieve a year-on-year growth of about 20%, with the expected order amount reaching around 72 billion yuan, and the proportion in total investment is expected to increase to 24% to 25%. The speed of domestic equipment, materials, and components being validated and introduced in downstream processes is accelerating, and the localization process of the industrial chain is speeding up, with downstream packaging and testing equipment ramping up, and the localization process of testing equipment proceeding smoothly.
On the other hand, advanced logic and memory chip manufacturers continue to expand production capacity, coupled with continuous technological breakthroughs in advanced process equipment, jointly driving a significant increase in demand for semiconductor equipment and components.Among them, packaging equipment has been positively impacted first.
In the first half of the year, Changdian Technology achieved operating revenue of 18.61 billion yuan, a year-on-year increase of 20.1%; among them, the second quarter achieved operating revenue of 9.27 billion yuan, a year-on-year increase of 7.2%, setting a historical high for the same period. Huada Semiconductor achieved a net profit of 226 million yuan in the first half of the year, a year-on-year increase of 15.81%, with the second quarter achieving operating revenue of 4.211 billion yuan, an increase of 643 million yuan quarter-on-quarter, setting a new high for a single quarter’s revenue scale.
The continuous growth in computing power demand has driven the advanced packaging market to a high level of prosperity. Driven by strong demand for AI computing chips from companies like Cambrian and Huawei Ascend, the advanced packaging industry chain has entered an active expansion phase due to tight production capacity. The increase in orders in the packaging and testing stages will also become a driving force for the semiconductor equipment industry.
04The Road is Long and Challenging, but Progress is Possible
The Chinese semiconductor equipment industry is showing a strong momentum for independent development. However, at the current stage of development, semiconductor equipment companies still face numerous challenges. Under the pressure of breakthroughs in high-end technology, continuous high R&D investment has become a necessary choice; however, the long market validation cycle and slow cash flow recovery characteristics of the semiconductor equipment industry also mean that some companies are always facing the reality of increasing revenue without increasing profits.
The road ahead remains fraught with challenges..
