[News] China’s Semiconductor Capital Expenditure Slows, Equipment Suppliers Cut 2025 Revenue Forecasts

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According to a report from Commercial Times, despite the continued growth in semiconductor demand driven by the AI boom, capital expenditure in China’s semiconductor industry has started to slow. Consequently, the Semiconductor Equipment Association of Japan (SEAJ) has revised its sales forecast for the 2025 fiscal year, which begins this April.

The report mentions that SEAJ had previously forecasted in July 2024 that the total revenue of Japanese semiconductor equipment manufacturers in the 2025 fiscal year would reach 4.68 trillion yen (approximately USD 30.1 billion). However, the forecast has been revised downward, with SEAJ now projecting a revenue growth of only 5%, bringing the total to 4.66 trillion yen (approximately USD 30 billion).

Citing SEAJ, the report highlights that Japanese semiconductor equipment manufacturers experienced an estimated revenue growth rate of 20% in the 2024 fiscal year. In contrast, the growth rate for the 2025 fiscal year is expected to drop considerably.

Although TSMC recently announced a 40% increase in capital expenditure for 2025, giving Japanese semiconductor equipment manufacturers high hopes, SEAJ’s latest forecast reflects a more cautious perspective. SEAJ attributes this to the view that Chinese semiconductor manufacturers over-invested in equipment in 2024. As a result, these manufacturers may pause new equipment purchases in 2025 and instead focus on optimizing the utilization of their existing equipment, according to SEAJ as cited in the report.

As noted by the report, IndexBox’s statistics show that Japan’s photomask equipment exports totaled USD 1.8 billion in 2024. Nearly USD 700 million of this amount was exported to China, making it the largest destination, followed by Taiwan and South Korea.

SEAJ further states that while the slowdown in capital expenditure growth among Chinese customers is negatively affecting the revenue of Japanese semiconductor equipment manufacturers in 2025, SEAJ is still optimistic about the long-term demand for AI chips, as the report highlights.

Additionally, the report notes that SEAJ expects the revenue growth rate for Japanese semiconductor equipment manufacturers to expand to 10% in the 2026 fiscal year.

The members of SEAJ include major semiconductor equipment manufacturers from Japan, such as Tokyo Electron, Advantest, Screen Holdings, and Disco Corporation, according to the report.

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(Photo credit: Screen Holdings)