China Mainland Chip Equipment Market will Shrink to Less Than $40 Billion in 2025

Chinese mainland's chip manufacturing equipment market will shrink next year due to early snapping up in Chinese mainland amid heightened tensions between China and the United States.

According to SEMI, an international chip industry organization, Chinese mainland's spending on chip manufacturing equipment will exceed $40 billion for the first time in 2024. But SEMI said at a meeting in September that spending on chip equipment in Chinese mainland will not reach $40 billion in 2025, falling back to 2023 levels.

An executive of the Chinese mainland branch of an international chip manufacturing equipment supplier said: "In 2025, the Chinese mainland market is expected to decline by 5%~10% compared with the previous year. The executive added: "Equipment utilization delivered to semiconductor factories in Chinese mainland is declining, and previous snap-ups will lead to a shrinking market in 2025."

Chinese mainland accounted for about 50% of sales from Dutch chip manufacturing equipment supplier ASML from July to September. However, ASML expects its Chinese mainland market share to fall to around 20% by 2025, so the company lowered its revenue forecast for the year.

The market contraction is not limited to 2025. According to SEMI data, chip manufacturing equipment spending in Chinese mainland will decline by an average of 4% between 2023 and 2027 at a compound annual growth rate. By comparison, spending in the Americas will grow by 22 percent annually in the coming years, Europe and the Middle East by 19 percent, and Japan by 18%.

However, Chinese mainland is still the world's largest market for chip manufacturing equipment. Chinese mainland spending on semiconductor factory equipment is expected to reach $144.4 billion between 2024 and 2027. This expenditure is higher than South Korea's $108 billion, Taiwan's $103.2 billion, the Americas' $77.5 billion and Japan's $45.1 billion.

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