AI infrastructure investment continues to accelerate, driving strong growth in the global semiconductor market. Memory and logic chips are the primary drivers of this growth, and AI is fueling sustained rapid increases in global semiconductor equipment spending, according to a research report from Central China Securities Co.,Ltd. (ASX: 601375).

SEMI forecasts that global semiconductor equipment sales will reach US$165.9 billion in 2026, up 23.2% year-on-year, and are expected to hit US$229.5 billion by 2028. Memory-related equipment spending is expected to continue accelerating its expansion. Global fabs are ramping up capacity expansion, with Samsung and SK Hynix planning to nearly double DRAM capacity by 2030.

AI Drives Accelerated Global Fab Expansion; Domestic Semiconductor Equipment Makers Poised to Benefit

AI infrastructure investment continues to accelerate, driving strong growth in the global semiconductor market, with memory and logic chips serving as the primary growth drivers. AI is fueling sustained rapid growth in global semiconductor equipment spending. SEMI estimates that global semiconductor equipment sales will reach US$165.9 billion in 2026, up 23.2% year-on-year, and are projected to reach US$229.5 billion by 2028, with memory-related equipment spending expected to continue accelerating.

Global fabs are accelerating capacity expansion, with Samsung and SK Hynix planning to nearly double DRAM capacity by 2030. According to Counterpoint Research, ChangXin Technology's global DRAM market share rose from 3% in Q1 2025 to 8% in Q1 2026, while Yangtze Memory's global NAND market share increased from 8% in Q1 2025 to 13% in Q1 2026. Both companies are steadily gaining market share. Omdia estimates that China's memory market will account for approximately 51% of the global total in 2026. Currently, China's memory market remains highly dependent on imports, leaving substantial room for domestic substitution by ChangXin Technology and Yangtze Memory, with broad expansion potential ahead. Domestic semiconductor equipment manufacturers are expected to enter a golden period of development.

US, Japanese, and Dutch Firms Dominate Global Semiconductor Equipment Market; Domestic Players Accelerate Development

Chip manufacturing can generally be divided into silicon wafer production, front-end wafer fabrication processes, and back-end packaging and testing processes. Semiconductor front-end equipment includes lithography machines, etching machines, thin-film deposition equipment, ion implantation equipment, CMP equipment, cleaning equipment, coating and developing equipment, thermal processing equipment, and metrology and inspection equipment. Semiconductor back-end equipment includes testers, probe stations, thinning machines, dicing machines, die bonders, bonding machines, molding machines, and sorting machines.

Currently, the global semiconductor equipment market is dominated by companies from the United States, Japan, and the Netherlands, with mainland China being the world's largest semiconductor equipment market. According to Jiwei Consulting, the localization rate of installed semiconductor equipment in mainland China rose from less than 10% around 2020 to approximately 35% in 2025. However, localization rates for metrology and inspection equipment, coating and developing equipment, and lithography machines remain very low, making these key areas for achieving self-sufficiency in semiconductor equipment.

As overseas restrictions on advanced semiconductor equipment exports continue to tighten, domestic substitution for semiconductor equipment is steadily advancing. Domestic semiconductor equipment manufacturers are accelerating their development, and companies operating in segments with low localization rates or possessing the capability to break through advanced process nodes are expected to benefit significantly.

Domestic Semiconductor Equipment Makers Embrace New Overseas Opportunities

Looking at the expansion plans of leading overseas semiconductor equipment manufacturers, capacity expansion at Applied Materials, Lam Research, Tokyo Electron, and KLA has been relatively stable. Domestic semiconductor equipment manufacturers are entering a phase of accelerated capacity expansion, building up production reserves for future domestic substitution and overseas market expansion.

Currently, the proportion of overseas revenue for domestic semiconductor equipment manufacturers remains relatively low overall. In 2025, Hangzhou Changchuan Technology Co., Ltd. (SZSE: 300604), Beijing Huafeng Test & Control Technology Co., Ltd. (SSE: 688200), and Piotech Inc. (SSE: 688072) recorded year-on-year overseas revenue growth of 88.58%, 65.23%, and 53.62%, respectively. Skyverse Technology Co., Ltd. (SSE: 688361) and Shenzhen Jingzhida Technology Co., Ltd. (SZSE: 688627) achieved rapid growth from a low base, indicating that some domestic equipment manufacturers have already made breakthroughs in overseas markets.

With AI driving strong global demand for semiconductor equipment, capacity expansion at leading overseas semiconductor equipment manufacturers has been relatively stable overall, and equipment delivery cycles have been significantly extended. Domestic semiconductor equipment manufacturers are embracing new overseas opportunities. Companies with high overseas revenue growth are expected to continue gaining traction in overseas markets, while leading manufacturers with relatively low overseas revenue proportions may achieve new progress abroad.

Risk Warnings: Intensifying international geopolitical conflicts, fab expansion progress falling short of expectations, domestic semiconductor equipment manufacturers' R&D progress falling short of expectations, and domestic substitution progress falling short of expectations.