China's semiconductor production equipment (SPE) and wafer fabrication equipment (WFE) imports continued their sharp drop in November, Jefferies said in a Thursday research note.

SPE imports declined 18% year over year, marking their worst performance since May 2023.

Among the categories, WFE imports fell 19% year over year, following a 20% slide in the previous month. The decrease in lithography imports was more modest at 4%.

Overall semiconductor imports in China grew 3% year over year in November, the slowest pace in five months.

Jefferies said the slowdown was due to a weakening demand for consumer electronics, especially smartphones.

The equity research firm expects China's WFE capital expenditure to significantly drop in 2025, possibly at between 25% and 32%, amid tighter US export restrictions.