China’s chip equipment purchases set to decline in ’25

China’s chipmaking equipment purchases are expected to drop this year due to overcapacity and increased constraints from US sanctions, according to a consultancy.

China has been the top purchaser of wafer fabrication equipment for the past two years, buying $41 billion worth of tools and making up 40 per cent of global sales in 2024, according to Canadian semiconductor research company TechInsights.

China’s spending is projected to decrease to $38 billion this year, a 6 per cent drop from last year, reducing its global market share to 20 per cent. Boris Metodiev, a senior semiconductor manufacturing analyst at TechInsights, shared this information during an online seminar.

China made many purchases as a result of stockpiling, as the US imposed sanctions to hinder Beijing’s access to and production of chips that could be used for military applications or pose a threat to US national security.

Chinese chip companies, including SMIC and Huawei, have made advancements despite US sanctions, with SMIC producing an advanced chip last year through costly and labour-intensive methods.

Attribution: Reuters

Subediting: M. S. Salama