Export control headwinds are hitting the chip industry, with semiconductor equipment giant Applied Materials being one of the hardest struck. According to Bloomberg, the company has been forced to halt equipment maintenance services for some customers in China, leading to a $400 million revenue loss in FY2025.

About half of that impact will be reflected in the current quarter, the report adds. However, Applied Materials CEO Gary Dickerson expects service growth to recover in the long run, as per Bloomberg.

Stricter U.S. export controls have hit Applied Materials hard indeed. In Q1 FY25 (ending Jan. 26), China made up 31% of its sales, down from 45% in the same period in FY24.

The impact of U.S. chip curbs is also evident across the industry. In the latest quarter, China made up only 27% of ASML’s sales, down from 39% a year ago and 47% in the previous quarter.

On the other hand, Applied Materials reported quarterly revenue of $7.17 billion with a 7% year-over-year increase, with a profit of $2.38 per share, according to its press release. However, the company forecasts a lukewarm second quarter, with its revenue slightly declining to $7.1 billion.

According to Bloomberg, Applied Materials notes that the surge in orders from Chinese memory makers has not continued into 2025. Meanwhile, high demand for advanced equipment needed for AI components is offsetting weaker demand from makers of legacy chips.

According to Applied Material, in semiconductor systems, which contributed about three quarters of its revenue, sales from foundry-logic rose 20% year-over-year in the first quarter. While NAND revenue slightly increased 3% YoY, DRAM sales dropped 10%.

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• [News] Applied Materials and Lam Research Reportedly Seek Alternatives to Chinese Components
• [News] ASML CEO Christophe Fouquet: U.S. EUV Export Ban Causes China’s Chip-Making to Lag by 10-15 Years

(Photo credit: Applied Materials)

U.S. President Donald Trump has accused Taiwan of taking away America’s semiconductor business, putting the spotlight on how TSMC will respond. According to a report by Taiwan’s Central News Agency (CNA), market sources indicate that TSMC may accelerate its plans for a third fab in Arizona, with groundbreaking expected in June alongside an official ceremony. TSMC stated that the project is progressing as planned.

Trump has proposed to impose tariffs on Taiwanese semiconductors, drawing widespread attention. Speculation about TSMC’s next moves includes ramping up advanced manufacturing in the U.S., expanding investments, or even taking a stake in or acquiring Intel’s wafer fabrication facilities.

CNA reports that market sources suggest TSMC’s third Arizona fab could break ground earlier than expected in June, with U.S. officials invited to the ceremony—underscoring the company’s commitment to expanding its American footprint.

TSMC declined to comment on market speculation but reiterated that its Arizona facility is progressing on schedule and that any public events would be announced accordingly.

TSMC’s first Arizona fab has begun mass production of 4nm chips in 4Q24, while the second fab is expected to be operational by 2028, utilizing more advanced nodes such as 3nm, 2nm, and A16 based on customer demand.

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• [News] TSMC, Broadcom Reportedly Explore Breaking Up Intel: Key Scenarios and Impacts in a Nutshell
• [News] Shocking Yet Feasible: U.S. Reportedly Pushes TSMC-Intel Joint Venture to Boost Domestic Chipmaking

(Photo credit: TSMC)

Recently, three major semiconductor projects worth tens of billions of RMB in Zhuhai, Kunshan, and Wuhan, China, have made significant progress.

The Yiyuan Semiconductor Materials Industrial Base project in Jinwan District, Zhuhai, is expected to commence production in February 2026. Luxshare Precision’s 10-billion-yuan industrial project has officially signed and settled in Kunshan, while YOFC Advanced Wuhan Base is accelerating towards mass production.

Yiyuan Semiconductor’s 10-Billion-Yuan Project to Begin Production in 2026

According to the Zhuhai Municipal Bureau of Industry and Information Technology, on February 5, the Yiyuan Semiconductor Materials Industrial Base project in Jinwan District, Zhuhai, reported the latest progress. Phase 1 of the project is expected to start production in February 2026.

Earlier reports indicated that the project covers a total planned area of approximately 17.8 hectares, with a total investment of around 10 billion yuan. It will primarily produce globally advanced synthetic quartz components and silicon carbide power module substrates. The project is planned to be constructed and put into operation in two phases.

Luxshare Precision Signs 10-Billion-Yuan Major Industrial Project in Kunshan, Suzhou

On February 8, Luxshare Precision Industry Co., Ltd. (hereinafter referred to as “Luxshare Precision”) held a signing ceremony for a major 10-billion-yuan industrial project in Kunshan, Suzhou. With a total investment of 12 billion yuan, this is Kunshan’s largest investment project in the past three years. Once operational, the project is expected to generate an annual output value of 80 billion yuan.

The Luxshare project consists of two main parts. The first part is the next-generation smart terminal and wearable products project, with an investment of approximately 6 billion yuan and a land area of 9.2 hectares.

This project will focus on developing next-generation smart terminals and wearable products, further vertically integrating production capacity for smartphones and smart headsets, and building a full industry-chain ecosystem covering research, design, and manufacturing. Once completed, it is expected to generate an additional annual industrial output of approximately 60 billion yuan.

The second part is the smart precision acoustic headset product project, also with a total investment of 6 billion yuan, covering about 11.2 hectares. The project includes an R&D center, laboratories, and an intelligent manufacturing production base for a range of acoustic products, aiming to help Kunshan seize opportunities in the high-tech acoustic industry.

YOFC Advanced Wuhan Base Expected to Begin Mass Production in Q2 2024

According to a report from Hubei Daily on February 7, construction of the YOFC Advanced Wuhan Base is accelerating, with mass production expected to begin in May 2024, followed by yield improvement and capacity ramp-up.

Public records show that the YOFC Advanced Wuhan Base is a key project under Yangtze Optical Fibre and Cable Joint Stock Limited Company (YOFC), with a total investment exceeding 20 billion yuan. It focuses on the research and production of third-generation semiconductor power devices.

The project is located in Wuhan Optics Valley Science Island, covering approximately 229,400 square meters with a total building area of about 301,500 square meters.

Once completed, the project is expected to achieve an annual output of 360,000 six-inch silicon carbide (SiC) wafers and epitaxy, as well as 61 million power device modules, with applications spanning new energy vehicles, photovoltaics, energy storage, and charging stations.

(Photo credit: YOFC)

In 2024, the foundry industry continued to advance amidst market fluctuations and technological innovations. Leading foundries such as TSMC, SMIC, and Hua Hong Semiconductor have all released their annual financial reports.

Looking ahead to 2025, TrendForce predicts that the industry’s total output value will grow by 20%, driven by the rapid development of artificial intelligence. Industry insiders indicate that pricing strategies are becoming more differentiated, competition is intensifying, and a new wave of transformation is on the horizon.

TSMC Approves $17.14 Billion in Capital Expenditure and Invests an Additional $10 Billion in TSMC Global

TSMC’s total revenue for 2024 reached NT$2.8943 trillion, marking a 33.9% year-over-year increase. The company’s net profit after tax was NT$1.1732 trillion, with earnings per share (EPS) of NT$45.25—both record highs.

Notably, TSMC’s board of directors has approved approximately $17.14 billion in capital expenditures to expand and upgrade its advanced process capacities, as well as enhance its advanced packaging, mature, and specialty process capabilities. Additionally, TSMC plans to inject up to $10 billion into its subsidiary, TSMC Global, to reduce foreign exchange hedging costs.

SMIC Reports Record $8 Billion Annual Revenue with an 85.6% Capacity Utilization Rate

In 2024, SMIC achieved a record revenue of $8.03 billion, up 27.02% from 2023. However, the company’s gross margin was 18%, and net profit declined by 45.4% year-over-year to $493 million, mainly due to lower investment and financial income.

SMIC’s capital expenditure for 2024 was $7.33 billion, and by the end of the year, its 8-inch equivalent monthly wafer production capacity reached 948,000 wafers, with total wafer shipments exceeding 8 million.

For the first quarter of 2025, SMIC expects its revenue growth rate to surpass the industry average, while capital expenditures will remain roughly the same as in the previous year.

Hua Hong’s Inventory Adjustments Largely Completed in 2024

Hua Hong Semiconductor’s financial report for Q4 2024 showed revenue of $539.2 million, an 18.4% increase year-over-year and a 2.4% increase quarter-over-quarter. The gross margin stood at 11.4%, up 7.4 percentage points year-over-year but down 0.8 percentage points quarter-over-quarter.

For the full year, Hua Hong reported revenue of $2.004 billion, a 12.3% decrease from the previous year, mainly due to lower average selling prices, partially offset by increased wafer shipments. The company’s gross margin fell to 10.2%, down 11.1 percentage points year-over-year, primarily due to declining ASPs and rising depreciation costs.

Hua Hong’s operating expenses in 2024 totaled $360.9 million, an 8.4% increase from the previous year, driven by higher R&D expenditures and rising costs from new factory operations.

For Q1 2025, Hua Hong expects revenue to be between $530 million and $550 million, with a gross margin ranging from 9% to 11%.

How Will the Wafer Foundry Market Respond in 2025?

Regarding the outlook for 2025, SMIC CEO highlights two key trends. First, industries such as automotive are shifting to domestic supply chains, transitioning from validation to mass production, with some products entering full-scale manufacturing.

Second, with government policies stimulating consumer spending, inventory replenishment is increasing across sectors such as consumer electronics, IoT, and smartphones. As a result, the traditionally slow first quarter is expected to remain strong.

In terms of pricing, SMIC CEO notes that SMIC adheres to a market-based pricing strategy, maintaining prices without proactive reductions but willing to engage in strategic pricing discussions with key customers to maintain market share.

Meanwhile, TSMC has signaled price increases in its advanced process nodes. Starting in January 2025, the company plans to raise prices for its 3nm and 5nm processes by 5% to 10%, while the cost of its CoWoS (Chip on Wafer on Substrate) advanced packaging technology is expected to surge by 15% to 20%.

However, in the mature process segment, TSMC is offering mid-single-digit percentage discounts to customers with high-volume orders.

Powerchip Semiconductor Manufacturing Corporation (PSMC) is focusing on transformation, with its chairman announcing plans to shift away from producing widely used display drivers and sensor chips for the Chinese market in favor of developing 3D-stacked memory technology.

United Microelectronics Corporation (UMC) acknowledged the challenges of global capacity expansion, stating that it is collaborating with Intel to develop smaller and more advanced chips while diversifying beyond mature process manufacturing.

According to TrendForce’s latest forecast, the global wafer foundry industry is expected to grow by 20% in 2025, driven primarily by AI advancements and continuous improvements in advanced process technology.

The development of AI, particularly in Cloud AI and Edge AI, is anticipated to bring new opportunities to the industry. Additionally, AI-driven demand for power management chips may inject new vitality into the mature process sector.

TSMC is expected to maintain its leadership in advanced process nodes. By 2025, TrendForce predicts that TSMC’s CoWoS capacity will double to 75,000–80,000 wafers per month, fueled by the growing demand for AI-related customized chips and advanced packaging solutions.

(Photo credit: SMIC)

According to a report from OLED-info, South Korea’s Ministry of Trade, Industry, and Energy (MTIE) has announced a funding package of 38.7 billion won (approximately USD 26.5 million) to bolster the nation’s display industry.

The initiative aims to strengthen South Korea’s competitive edge in the display sector, particularly in the face of growing competition from China, as the report highlights.

The primary objective of this new initiative is to support South Korea’s OLED and MicroLED display industry. According to the report, the funding will be allocated to small and medium-sized enterprises, large corporations, as well as universities and research institutes.

A total of 40 project types will receive financial support, covering areas such as advanced OLED technologies, AR/VR innovations, microdisplays, and lightfield OLED displays. As noted in the report, all of these projects fall under R&D and will span a duration of one to four years.

TrendForce‘s latest OLED Technology and Market Development Report reveals that the penetration rate of OLED displays in notebooks is set to increase to 3% in 2024, driven by large-scale procurement from Chinese laptop brands.

While growth in 2025 is expected to be moderate, the anticipated introduction of OLED displays in Apple’s MacBook lineup will mark a significant turning point. This move is expected to prompt the activation of high-generation OLED production lines at panel makers, pushing the OLED notebook penetration rate beyond 5% by 2027. The influence of high-end markets will likely create a trickle-down effect on other brands’ product strategies and further accelerate OLED adoption in the IT sector.

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• [News] Samsung to Showcase the World’s Largest Foldable OLED Panel at CES 2025
• High-Generation Panel Production Expected to Drive OLED Notebook Penetration Rate Past 5% by 2027, Says TrendForce
• OLED Monitor Shipments to Reach 1.44 Million Units in 2024, Marking 181% YoY Growth, Says TrendForce

(Photo credit: Samsung)

According to a report from ijiwei, citing Business Korea, Micron Technology is set to begin mass production of its 12-stack HBM and will supply it to AI semiconductor giant NVIDIA.

As highlighted by the report, Micron completed the development of its 12-stack HBM in September 2024 and has since showcased samples to NVIDIA and other potential customers.

The report, citing sources, states that, during a recent event, Micron’s Chief Financial Officer, Mark Murphy, claims that Micron’s 12-stack HBM offers 20% lower power consumption and 50% higher capacity compared to competitors’ 8-stack products. He further predicts that, as the report notes, the majority of HBM production in the second half of 2025 will consist of 12-stack products.

Furthermore, as highlighted in the report, Murphy states that Micron’s next-generation HBM4 is expected to enter mass production in 2026.

Samsung Falling Behind in HBM Race

Meanwhile, Samsung Electronics appears to be lagging in HBM technology, as the report points out. Samsung has only recently begun small-scale production of 8-stack HBM and has yet to pass the testing phase for 12-stack HBM. As noted by the report, Samsung plans to send samples of its 12-stack HBM to NVIDIA by the end of the month, while final approval is still required before delivery.

In an effort to accelerate its transformation, Samsung is also aiming to begin mass production of HBM4 within the year. While earlier reports suggested Samsung was gearing up for 1c DRAM mass production, a report from ZDNet reveals that Samsung’s 1c DRAM has faced yield issues, with initial production in late 2024 not meeting expectations. The company has reportedly redesigning it since the second half of 2024, opting for larger chip sizes to boost yield over productivity and performance.

SK hynix Accelerates HBM4 Development

SK hynix, another memory giant, is also speeding up the development of HBM4 to meet NVIDIA’s growing demand. At CES 2025, SK Group Chairman Chey Tae-won confirmed that the company’s next-gen HBM development is now ahead of NVIDIA’s needs, according to Korea JoongAng Daily.

As per another ZDNet report, SK hynix aims to ship HBM4 samples to NVIDIA as early as June 2025, with full-scale product supply expected to begin around the end of the third quarter.

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• [News] SK hynix at Full Throttle for HBM Expansion with Engineers Reportedly Set for M15X Fab in March
• [News] Next-Gen HBM? NVIDIA Reportedly Teams up with Samsung/ SK hynix to Push SOCAMM for 2025 Production

(Photo credit: Micron)

As NVIDIA collaborates closely with memory heavyweights on their latest HBM products for AI accelerators, the U.S. chip giant is said to be in talks with Samsung and SK hynix to push the commercialization of a next-gen memory technology called SOCAMM (System on Chip Advanced Memory Module), according to Korean media outlets EBN and Business Korea.

The EBN report indicates that NVIDIA and memory manufacturers are exchanging SOCAMM prototypes for testing, with mass production potentially starting by the end of 2025.

At CES 2025, NVIDIA unveiled its GB10 Grace Blackwell Superchip and Project DIGITS, aiming to popularize personal AI supercomputers. SOCAMM, seen as the “next-gen” HBM with superior performance and power efficiency over traditional DRAM for small PCs and laptops, could be the key, according to EBN.

Notably, the EBN report implies that NVIDIA plans to use individual LPDDR for the first product of its “DIGITS” line, with plans to incorporate four SOCAMM modules in the next version.

The reports highlight that unlike DDR4 and DDR5-based SODIMM modules, SOCAMM uses low-power LPDDR5X for better efficiency and performance. With significantly more I/O pins, it can dramatically boost data transfer speeds, which would be crucial for AI computing, the reports add.

In addition, the biggest strength of SOCAMM is its “detachable module” design, which allows users to easily replace the memory, according to the reports.

The reports also suggest NVIDIA’s push for its own memory standard marks a major shift from JEDEC’s traditional framework. While JEDEC includes memory giants like Samsung, SK hynix, and Micron, its members also span semiconductor, server, and PC firms like Arm, NXP, Intel, HP, and Honeywell.

Read more

• [News] SK hynix Reported to Deliver HBM4 Samples to NVIDIA in June, with Mass Production by Q3 2025
• [News] NVIDIA’s GB10 Superchip Powering Project DIGITS is Reportedly Built with TSMC’s 3nm Node

(Photo credit: NVIDIA)

According to a report from Korean Economic Daily, citing industry sources, SK hynix has initiated an urgent review of Chinese semiconductor Electronic Design Automation (EDA) software anticipating that the U.S. may impose restrictions on South Korean semiconductor firms using Chinese software.

One of the main reasons behind SK Hynix’s move, as highlighted by the report, is the U.S. government’s recent decision to designate Empyrean Korea, the South Korean branch of Chinese EDA firm Empyrean, as a restricted entity for trade.

The report indicates that industry predictions suggest SK hynix will likely halt the use of Chinese EDA software to avoid straining relations with the U.S., a key player in the global semiconductor market. The relatively low reliance on Chinese EDA software within SK hynix’s overall operations reinforces this expectation, as the report notes.

Meanwhile, Samsung Electronics, which has been utilizing Chinese EDA solutions from Empyrean, Primarius, and Entasys since 2022, is also expected to take a similar course of action, as mentioned in the report.

The Rise of Chinese EDA Companies

The report highlights that the EDA market is predominantly dominated by American companies such as Synopsys, Cadence, and Siemens EDA.

According to TrendForce, Synopsys, Cadence, and Siemens EDA account for 32%, 29%, and 13% of the market, respectively, in 2024, for a total 74% market share.

However, in recent years, China has been increasing its presence in the market by developing cost-effective EDA solutions, as the report points out. Chinese firms such as Empyrean, Primarius, and Entasys have emerged as key players in this segment.

Samsung Electronics and SK hynix, which have traditionally relied on American EDA software, have recently started using Chinese alternatives as well. This shift, as indicated by the report, was primarily driven by aggressive sales efforts from Chinese firms, which, facing export restrictions to the U.S., sought to expand their business with Samsung and SK hynix.

Moreover, as noted by another report from The Korean Economic Daily, citing industry sources, the development of an EDA ecosystem in South Korea is relatively slow. While South Korea leads the global HBM market, there is currently no EDA technology in the country capable of integrating AI and HBM.

China’s EDA Giant Empyrean Cedes Control to State-Owned Firm After U.S. Blacklist

Notably, according to a report from the South China Morning Post, a week after Empyrean Technology was added to the U.S. blacklist of chip export controls, the Chinese chip design software developer ceded control to its largest state-owned shareholder, China Electronics Corporation (CEC).

The South China Morning Post report highlights that Empyrean Technology, supported by China’s push to localize its semiconductor supply chain, now holds a modest 5% share of China’s EDA market.

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• [News] China’s Semiconductor Equipment Industry Booming, Self-Sufficiency to Reach 50% by 2025?
• [News] China’s EDA Giant Empyrean Technology Shifts Control to State-Owned Company after U.S. Blacklist
• [News] SK hynix at Full Throttle for HBM Expansion with Engineers Reportedly Set for M15X Fab in March

(Photo credit: SK hynix)

With Trump pushing tariffs to boost U.S. chipmaking, rumors swirl about a TSMC-Intel deal. Now, Wall Street Journal and Reuters report that while TSMC eyes Intel’s foundry unit, Broadcom may join in, targeting Intel’s chip design and marketing business. Broadcom has had informal talks on pricing but may only make a bid if a partner takes Intel’s manufacturing unit, as noted in the reports. Here’s a quick summary of all the possible scenarios, and the challenges.

How Would TSMC Possibly Be Involved?

Another Economic Daily News report indicates that if Intel’s foundry does spin off, TSMC may acquire a 20% stake in the unit, either through direct investment or technology valuation, though details are undecided.

Though previous reports noted that U.S. is pushing the foundry giant and Intel to form a joint venture to co-own and develop multiple chip foundries, Reuters does not quite agree. The Trump administration supports foreign companies investing and building in the U.S., but is unlikely to approve a foreign firm running Intel’s factories, the report adds.

During TSMC’s earnings call last October, Chairman C.C. Wei dismissed speculation about acquiring Intel’s fabs, stating they are not considering it.

Other options for TSMC could include building an advanced packaging plant in the U.S. or having Intel handle future packaging orders for U.S. customers, according to previous media reports.

The Role of Broadcom and Qualcomm

The dream team may also get more players involved. According to Bloomberg, though the talks are in early stages, the deal could include major U.S. chip designers taking equity stakes.

According to the Economic Daily News, Intel’s spun-off foundry unit (IFS) would likely bring in major U.S. chip giants like Qualcomm and Broadcom to drive innovation and help Intel recover, while countering the growth of Taiwan’s IC designers such as MediaTek, as it is aggressively gaining market share in mobile and networking chips.

The Economic Daily News report adds that Qualcomm and Broadcom will invest in IFS solely for advanced chip production capacity, without involvement in fab operations.

Interestingly enough, in a December interview with the Financial Times, Broadcom CEO Hock Tan said he was not interested in buying parts of Intel, as the company’s current focus would be on shifting toward specialized AI chips.

Impact on Samsung

The rumored collaboration between TSMC and Intel, notably, could weigh heavily on Samsung. According to Korea Joongang Daily, the stronger the U.S.-Taiwan alliance, the more it harms Samsung, which lags behind in the foundry market.

There are also concerns that the Trump administration might target Samsung’s memory semiconductors next, the report adds. While the focus has been on the foundry sector, it’s expected that the U.S. will eventually extend its efforts to memory semiconductors to secure the domestic supply chain, as highlighted in the report.

According to TrendForce, TSMC led the foundry market in Q3 2024 with a 64.9% share, while Samsung was second with just 9.3%.

Read more

• [News] Shocking Yet Feasible: U.S. Reportedly Pushes TSMC-Intel Joint Venture to Boost Domestic Chipmaking
• [News] Intel’s Potential Buyers Speculated Ahead of Trump’s Inauguration: A Quick Round-up

(Photo credit: Intel)

Recently, Tokyo Electron (hereinafter referred to as “TEL”) announced plans to build a new production facility in Miyagi Prefecture, Japan. The facility will be managed by TEL’s manufacturing subsidiary, TEL Miyagi, and will primarily produce semiconductor manufacturing equipment such as plasma etching systems to meet the rapidly growing demand for semiconductors in recent years.

According to TEL, the estimated construction cost of the new facility is approximately 104 billion yen. Construction is expected to begin in June 2025 and be completed by the summer of 2027. TEL aims to make this facility one of the world’s leading semiconductor equipment factories.

Expansion of the Semiconductor Equipment Market

It is well known that semiconductor manufacturing is a highly complex process, requiring different types of equipment at various stages, including wafer fabrication, packaging, and testing equipment. From a process perspective, semiconductor equipment is also categorized into front-end and back-end equipment.

Currently, the development of artificial intelligence (AI), big data, memory chips, and other industries is driving the global semiconductor sector toward a trillion-dollar market scale. This trend is expected to create more opportunities and growth potential for semiconductor equipment manufacturers.

SEMI previously predicted that global semiconductor equipment sales would reach $113 billion in 2024, representing a 6.5% year-on-year increase. The Chinese market is expected to achieve record-high sales of $49 billion. Additionally, SEMI forecasts that global semiconductor equipment sales will further rise to $121 billion in 2025 and $139 billion in 2026.

The global semiconductor equipment market is currently dominated by major international companies such as ASML, Nikon, Canon, Lam Research, Applied Materials, TEL, ASM, and KLA.

Among them, semiconductor equipment giant ASML released its full-year and Q4 2024 financial report on January 29. The data showed that ASML achieved a record-high net sales revenue of €28.3 billion and a net profit of €7.6 billion for the full year of 2024. In Q4, net sales reached €9.3 billion, while net profit stood at €2.7 billion, both exceeding expectations.

Multiple Chinese A-Share Companies Disclose 2024 Performance Forecasts

Although China’s semiconductor equipment industry still lags behind international manufacturers in terms of technology, significant efforts from the industry and strong government support have enabled China to become the world’s largest semiconductor equipment market, with further growth ahead.

The major semiconductor equipment companies in China include NAURA, AMEC, ACM Research, Hwatsing, Piotech, Jingce Electronics. Based on the 2024 performance forecasts disclosed by multiple companies, the semiconductor equipment market in China is showing positive development.

According to TrendForce, out of the eight A-share semiconductor equipment companies that disclosed their 2024 performance forecasts, five reported revenue growth, and three saw an increase in net profit.

(Photo credit: Naura)