With the growth in demand and domestic substitution, the domestic semiconductor industry continues to expand production, benefiting wafer manufacturing plants, equipment, and consumables, but the degree of benefit varies, necessitating quantitative analysis. It is well known that many domestic data are not published, requiring cross-validation from various market data for reasonable inference. This article predicts the scale of domestic expansion based on various data sources and analyzes the market opportunities for equipment brought by this expansion. The next article will analyze the market opportunities for consumables.【Production Capacity】1. Current ScaleAccording to information from the 9th Jiemicro Semiconductor Conference in 2025: In 2025, domestic 8-inch capacity is approximately 1.48 million wafers (unless otherwise noted, this refers to monthly capacity), and 12-inch capacity is approximately 1.97 million wafers.Equivalent to approximately 2.7 million 12-inch wafers, of which complex processes (including logic XJ and memory, the same below) account for about 420,000 wafers, and mature processes account for about 2.28 million wafers. The proportions of complex and mature process capacities are 15% and 85%, respectively.2. Expansion ScaleAccording to information from the 9th Jiemicro Semiconductor Conference in 2025: Domestic planned capacity is approximately 4.4 million wafers (equivalent to 12-inch), with an expansion space of about 1.7 million wafers. Assuming in the next 5 years: Logic XJ expands by 100,000 wafers, reaching a capacity of 120,000 wafers by 2030. Memory expands by 1.2 million wafers, reaching a capacity of 1.6 million wafers by 2030. Assuming a 3% annual expansion rate for mature processes, the expansion capacity is 360,000 wafers, reaching a capacity of 2.64 million wafers by 2030. Based on the above analysis, the total expansion in the next 5 years is 100,000 + 1,200,000 + 360,000 = 1,660,000 wafers, which is very close to the 1.7 million wafers mentioned at the 9th Jiemicro Semiconductor Conference in 2025. This article assumes a uniform expansion each year over the next 5 years. By 2030, domestic wafer manufacturing capacity will reach 120,000 + 1,600,000 + 2,640,000 = 4,360,000 wafers. The proportions of complex and mature processes will be 39% and 61%, respectively.【Current Equipment Status】1. Analysis for 2024SEMI estimates that domestic equipment expenditure in 2024 will be approximately $49.6 billion (350 billion RMB). Mr. Yin from Zhongwei proposed at the CSEAC 2025 conference that domestic equipment expenditure in 2024 will be approximately $45.8 billion (325 billion RMB). The Semiconductor Industry Association estimates that the total manufacturing equipment expenditure for the year will be about 230 billion RMB, and assuming manufacturing equipment accounts for 80%, the total equipment will be about 290 billion RMB. There are discrepancies among these three data points, suggesting that SEMI’s statistics may include equipment for material manufacturers. For this time, the domestic manufacturing equipment expenditure for 2024 is taken as 320 billion RMB.2. Forecast for 2025At the beginning of the year, SEMI predicted that domestic equipment expenditure in 2025 would be approximately $38 billion (270 billion RMB). Mr. Yin’s prediction is very close to SEMI’s forecast. However, in the third quarter of 2025, domestic equipment expenditure is expected to grow significantly, especially for imported equipment, and the total annual equipment expenditure is expected to exceed SEMI’s forecast value.For this time, the domestic manufacturing equipment expenditure for 2025 is taken as 300 billion RMB.【Growth Highlights】There are three growth factors for the equipment market scale:Industry growth and domestic expansion,Process advancements leading to increased value of single-line equipment,Domestic substitution of equipment.1. Industry Growth and Domestic ExpansionCompared to the significant domestic expansion, the impact of industry growth is relatively small. Considering both factors together, the expansion scale quantifies the growth rate.In the next 5 years, the expansion scale is 1.66 million wafers, increasing from 2.7 million wafers to 4.36 million wafers, with an average annual growth rate of about 10%.2. Increased Value of Single-Line EquipmentWith process advancements, the value of single-line equipment increases, especially for etching machines, thin film deposition, and measurement equipment. Assuming by 2030, the value of five types of front-end equipment for complex processes (GK, etching, thin film deposition, measurement, and others) increases by 20%, 40%, 35%, 40%, and 10%, respectively, while the increase for mature processes is taken as half of that. The previous analysis shows that the proportions of complex and mature processes are 39% and 61%, respectively, calculating that the overall increase is 22%, with complex processes increasing by 30% and mature processes by 12%. Assuming uniform expansion over the next 5 years. Currently, the investment standards for expanding production lines (XJ logic, memory, mature) are taken as 20 billion RMB, 8 billion RMB, and 4.5 billion RMB, respectively. Mature processes are calculated based on an 8-year update cycle and an annual expansion rate of 3%. Considering the increase in single-line value, by 2030, the scale of mature process equipment will be 264 * 45 * (1/8 + 3%) * (1 + 12%) = 206.5 billion RMB. The scale of complex process equipment will be (12 * 200 + 120 * 80) * (1 + 30%) / 5 = 300.5 billion RMB.Thus, by 2031, the domestic equipment scale will be 206.5 + 300.5 = 507 billion RMB, with an average annual growth rate of 11%. Among them, the front-end equipment is about 378 billion RMB (excluding GK equipment).3. Domestic SubstitutionFirst, analyze the domestic substitution rate for 2024: There are various data on the domestic equipment substitution rate for 2024. The Semiconductor Industry Association proposes it to be 25%; Mr. Yin suggests it to be 18%. We infer from other sources: Recently, the U.S. Congress proposed that the five major equipment companies (ASML, Applied Materials, Lam Research, KLA, Tokyo Electron) will have revenues of approximately $38 billion (270 billion RMB) in mainland China in 2024. Research institution CINNO IC Research pointed out that the revenues of the five major equipment companies account for 85% of the global TOP10. We assume that the revenues of the five major equipment companies in mainland China account for 80% of the total import amount, while considering the recent accumulation of imported equipment in the domestic market, the immediate import demand is reduced by 30%. Thus, the domestic import equipment amount in 2024 is approximately 2700/0.8*0.7=236 billion RMB, with an import rate of about 2360/3200=74%, and a domestic rate of 26%. In 2024, the domestic revenues of the top 8 front-end equipment companies are about 56 billion RMB. In 2024, the top ten domestic equipment leaders account for 80.7% of the total revenue of 82 equipment manufacturers. The domestic equipment revenue is about 560/80.7%=695 billion RMB. The domestic rate is 695/3200=22%. In summary, the domestic rate for 2024 has different data points of 18%, 22%, 25%, and 26%. Now, predicting the domestic substitution rate for 2025: In 2025, the domestic revenues of the top 8 front-end equipment companies are predicted to be 74 billion RMB. Assuming they still account for 80.7% of all domestic equipment manufacturers, the domestic equipment revenue is about 740/80.7%=910 billion RMB. The domestic rate is 910/3000=30%. In the first half of 2025, the revenues of the five major equipment companies in mainland China decreased year-on-year, but in the third quarter, there was a significant increase (ASML increased by 50% quarter-on-quarter, KLA increased by 30% quarter-on-quarter), predicting the total annual import amount to be $35 billion (248.5 billion RMB). Still following the principle that the five major companies account for 80% of total imports and the accumulation of imported equipment reduces demand by 30%, the domestic import equipment amount for 2025 is 2485/0.8*0.7=217.5 billion RMB, with an import rate of about 2175/3000=73%, and a domestic rate of 27%.In summary, the domestic rate for 2025 is taken as 28%, excluding GK equipment, it is 37%. Assuming that by 2030, the domestic rate will increase to 50%, excluding GK equipment, it will be 62%.4. Equipment Market ScaleIn 2025, the equipment market scale is approximately 300 billion RMB, with front-end equipment (excluding GK equipment) about 182 billion RMB, and a domestic rate of about 37%, thus the scale of domestic equipment is 67 billion RMB. Compared to the previous prediction of 740 billion RMB for domestic front-end equipment company revenues in 2025, there is a discrepancy of 7 billion RMB. This time, a compromise of 70 billion RMB is taken. In 2030, the equipment market scale is approximately 507 billion RMB, with front-end equipment (excluding GK equipment) about 378 billion RMB, and a domestic rate of about 62%, thus the scale of domestic equipment is 235 billion RMB. From 700 billion RMB in 2025 to 2.35 billion RMB in 2030, the average annual growth rate is about 27%.【Conclusion】1. Overall Market ScaleBy 2030, the expenditure on front-end equipment (excluding GK equipment) will be 378 billion RMB, with a domestic rate of 62%, thus the scale of domestic equipment market will be 235 billion RMB, with an average annual growth rate of about 27%.2. The growth rate of measurement equipment will be even more significant Measurement equipment currently has the lowest domestic rate, thus there is vast potential for future domestic substitution. If the technology of domestic measurement equipment progresses smoothly, the average annual growth rate is expected to exceed 40%.3. The performance growth of equipment companies is a second derivative of capacity The performance growth of equipment companies is a second derivative of capacity. Next year, expanding by 20,000 wafers, the following year still expanding by 20,000 wafers, disregarding other factors, the performance for wafer plants and consumables companies will double, but for equipment companies, it will be zero growth. Of course, under domestic substitution and increased single-line value, even if the expansion scale does not grow, the equipment market scale will still increase. However, note this second derivative model; in the future, although there will be significant expansion, extending the time frame, the annual growth rate of equipment companies may not exceed the average growth rate of the past five years, nor will it necessarily exceed that of consumables companies.4. Annual Revenue Growth Rate is Related to Expansion Rhythm The above analysis is based on the assumption of uniform expansion over the next 5 years. The future expansion rhythm will certainly fluctuate, corresponding to the performance of equipment companies will also have fluctuations. In the next two to three years, the revenue growth rate of domestic equipment companies will be very high, but the growth rate is likely to decline significantly in the later stages.Personal opinion, not constituting any advice.