Greater China Semiconductors: Double Catalysts from Memory Expansion and Huawei's t (Tau)-Law

研报英文原文证据摘录

Greater China Semiconductors: Double Catalysts from Memory Expansion and Huawei's t (Tau)-Law

IdeaM

China WFE Market Outlook Raised on Stronger AI and

Memory Investment Cycles

China WFE market outlook revised higher on stronger AI and memory

investment cycle

Following our Global Semi team’s WFE forecast upgrade, we now project China’s WFE

market to grow 15% Y/Y to US$48bn in 2026, then a further 18% Y/Y to US$56bn in 2027.

Stronger-than-expected memory foundry investment and sustained domestic AI-related

semiconductor demand primarily drive the revision.

China remains a key contributor to incremental WFE demand despite ongoing export

restrictions. Our industry checks indicate Chinese foundries and memory players continue

expanding capacity across mature and advanced nodes to support domestic AI compute,

automotive, and industrial demand. While US-origin restrictions still limit direct access to

some leading-edge tools, Japanese and domestic Chinese vendors have increasingly filled

gaps across multiple process steps.

In parallel, local equipment suppliers are accelerating product localization and broadening

technology coverage, particularly in etch, deposition, and cleaning systems. We therefore

remain constructive on China domestic WFE vendors, as ongoing localization and capacity

expansion should continue to support market share gains and revenue growth over the

next several years.

Exhibit 1: China's WFE market – Our forecasts Exhibit 2: Chinese WFE vendors is expected to account for

25% of local WFE market share in 2026e

China WFE China WFE (y/y)

70,000 60% ASML Western Players (ex-ASML) China Players

60,000 50% 90%

50,000 40% 80%

30% 70% 40,000

20% 60%

30,000

10% 50%

20,000 0% 40%

10,000 -10% 30%

20%

0 -20%

10%

2020 2021 2022 2023 2024 2025 2026e 2027e 2028e

0%