China's semiconductor equipment imports fell 6% YoY in May as equipment demand normalization continued

Overview

This report is Bank of America's monthly tracking of China's semiconductor equipment imports, with core data sourced from China's customs import statistics. The report focuses on China's semiconductor equipment imports in May 2026, year-over-year and month-over-month changes, and breaks down categories including front-end, back-end, lithography, deposition, etching, thermal processing, ion implantation, process control, wafer fabrication, flat panel display, assembly and packaging, spare parts, wire bonders, mounting and bonding, and testing.

Core views

The core conclusion is that China's semiconductor equipment imports remain in a normalization process: total imports in May fell 6% year over year and 16% month over month, and were down 11% year to date in 2026. Front-end equipment was weak overall, but internal structure was mixed, with deposition, process control, ion implantation, and thermal processing still posting year-over-year growth; categories such as etching, Other Front-end, wafer fabrication, and assembly and packaging were weaker. The report also emphasizes that China's import data has a strong mapping relationship with the sales trends in China of major global semiconductor equipment suppliers, and can therefore be used to track the China business momentum of companies such as Applied Materials, Lam Research, Tokyo Electron, ASML, and KLA.

Analysis framework

The report uses monthly China customs import data as the main thread, analyzing changes in demand for various semiconductor equipment categories through import value, year-over-year change, month-over-month change, 3-month moving average, unit volume, and ASP, and compares total China front-end equipment imports with China equipment sales disclosed by major semiconductor equipment suppliers.

Methodology notes

• Industry high-frequency data trackingChina customs semiconductor equipment import tracking

  Use monthly import value, year-over-year change, month-over-month change, and 3MMA to measure China's semiconductor equipment demand trend.

  The report believes China will account for 33.5% of global WFE in 2025, making China import data an important high-frequency observation window for global semiconductor equipment demand.

• Revenue proxy indicatorSupplier China sales mapping

  Compare front-end equipment import value with China equipment sales disclosed by major equipment companies.

  The China equipment sales disclosed by the five major semiconductor equipment companies—Applied Materials, Lam Research, Tokyo Electron, ASML, and KLA—are roughly equal to 75% of China's front-end equipment customs imports on an annual basis, with the quarterly range at 58% to 85%, and 79% in 1Q26.

• Volume-price decompositionUnit volume and ASP analysis

  Break down the sources of import value changes through unit import volume and ASP.

  The report compares import value, unit volume, and ASP across subcategories such as lithography, deposition, etching, thermal processing, ion implantation, and process control to determine whether growth comes from volume, price, or both.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Global semiconductor equipment suppliers

  China customs import data can serve as a high-frequency proxy indicator for their China sales trends.

  Strengths

  China has a high share of global WFE, accounting for 33.5% in 2025, so the data is important for assessing demand for global equipment suppliers.

  Weaknesses

  There are timing differences between customs import value and company revenue recognition, and monthly data is volatile.

  Comparison

  The China equipment sales disclosed by the five major suppliers are about 75% of front-end import value on an annual basis, and 58% to 85% on a quarterly basis.

  Risks

  China sales normalization, export controls, changes in customer procurement cadence, and ASP fluctuations may affect revenue visibility.

• ASML and the Netherlands lithography equipment chain

  Netherlands lithography imports are highly correlated with ASML's China equipment sales.

  Strengths

  In May 2026, Netherlands lithography tools accounted for 93% of total lithography import value, with historical correlation reaching 95%.

  Weaknesses

  Lithography equipment import value was still down 2% year over year in May and down 24% year to date year over year.

  Comparison

  Lithography imports rose 109% month over month in May, but mainly rebounded after a 60% year-over-year decline in April.

  Risks

  Export restrictions, fluctuations in single-tool ASP, and order delivery cadence may cause large swings in monthly data.

• Front-end equipment chain

  Front-end equipment is the core component of China's semiconductor equipment imports.

  Strengths

  Deposition, process control, ion implantation, and thermal processing still posted positive year-over-year growth in May.

  Weaknesses

  Front-end overall fell 9% year over year and 20% month over month in May, and was down 13% year to date year over year.

  Comparison

  Deposition grew 12% year over year, but etching fell 33% year over year and Other Front-end fell 41% year over year, showing clear structural divergence.

  Risks

  If Chinese wafer fab capex continues to normalize, overall front-end equipment demand may remain under pressure.

• Back-end, packaging, and test equipment

  Reflects import demand in packaging, assembly, and testing processes.

  Strengths

  Wire bonders rose 67% year over year in May, test equipment rose 50% year over year, and flat panel display manufacturing equipment rose 63% year over year.

  Weaknesses

  Assembly and packaging overall fell 10% year over year, and test equipment was down 14% year to date year over year.

  Comparison

  Back-end internal elasticity is better than the overall total, but sustainability still needs to be observed in subsequent months.

  Risks

  A cyclical rebound may be affected by a low base, single-month orders, and inventory cadence.

Key data

• Total semiconductor equipment imports$3.2bnDown 6% year over year and 16% month over month in May 2026; below the prior 3-month average of $3.5bn and prior 12-month average of $4.5bn.
• Total import trend in 2026 year to date-11% yoyMay data brought the year-to-date decline in imports in 2026 to 11% year over year.
• 3-month moving average-3% yoy, +10% mom3MMA month-over-month was above the historical average 3MMA month-over-month change for this month of +5%.
• Front-end equipment imports$2.2bnDown 9% year over year and 20% month over month in May 2026; year to date $12.1bn, down 13% year over year.
• Lithography equipment$297mmDown 2% year over year and up 109% month over month in May 2026; year to date $2.1bn, down 24% year over year.
• Netherlands lithography imports93% of lithography importsIn May 2026, Netherlands lithography tools accounted for 93% of total lithography import value; since January 2015, Netherlands lithography customs import data has had a 95% correlation with ASML's disclosed China equipment sales.
• Deposition equipment$708mmUp 12% year over year and down 18% month over month in May 2026; year to date $3.3bn, up 3% year over year.
• Etching equipment$382mmDown 33% year over year and 25% month over month in May 2026; year to date $2.4bn, down 18% year over year.
• Thermal processing equipment$132mmUp 1% year over year and down 13% month over month in May 2026; year to date $675mm, up 2% year over year.
• Ion implanters$107mmUp 21% year over year and down 43% month over month in May 2026; year to date $562mm, down 2% year over year.
• Process control equipment$314mmUp 23% year over year and down 18% month over month in May 2026; year to date $1.4bn, down 15% year over year.
• Other Front-end$239mmDown 41% year over year and 52% month over month in May 2026; year to date $1.7bn, down 17% year over year.
• Wafer fabrication equipment$68mmDown 31% year over year and 46% month over month in May 2026; year to date $465mm, down 25% year over year.
• Flat panel display manufacturing equipment$221mmUp 63% year over year and 14% month over month in May 2026; year to date $1.1bn, up 18% year over year.
• Assembly and packaging equipment$343mmDown 10% year over year and up 12% month over month in May 2026; year to date $1.5bn, down 15% year over year.
• Spare parts$374mmDown 10% year over year and 10% month over month in May 2026; year to date $2.0bn, down 5% year over year.
• Test equipment$36mmUp 50% year over year and down 38% month over month in May 2026; year to date $169mm, down 14% year over year.
• Wire bonders and mounting/bondingwire bonders +67% yoy; mounting and bonding +6% yoyInternal structure within assembly and packaging diverged, with wire bonders up 88% month over month and mounting and bonding up 1% month over month.

Impact & implications

From an investment perspective, the decline in single-month imports and negative year-to-date growth support the view that China's semiconductor equipment procurement is normalizing from elevated levels, which may pressure expectations for China revenue growth of global equipment suppliers; however, some subcategories still posted year-over-year growth, indicating that demand is not contracting across the board, but instead diverging by equipment category, customer procurement cadence, and ASP changes.

Risks

• Monthly customs import data has timing mismatches and may not fully correspond to suppliers' current-period revenue recognition.
• The normalization of China's semiconductor equipment sales in 2026 may continue to pressure full-year year-over-year growth.
• Export controls and changes in cross-border trade policy may affect imports of lithography, advanced process equipment, and key components.
• ASP changes may amplify import value volatility, causing value growth rates to diverge from true equipment unit demand.
• Single-month data is heavily affected by delivery cadence and needs to be validated together with 3MMA and quarterly supplier disclosures.
• The five major suppliers have high but not 100% coverage, and import data has limited mapping to smaller suppliers and non-front-end categories.

What to watch

• Whether China's semiconductor equipment imports in June 2026 and subsequent months continue to stay below the 12-month average.
• Whether front-end equipment 3MMA year-over-year continues to decline, especially in etching, lithography, and Other Front-end.
• Whether the synchronicity between Netherlands lithography imports and ASML's China equipment sales is maintained.
• Whether year-over-year growth in deposition, process control, ion implantation, and thermal processing can continue.
• Whether the rebound in assembly and packaging, wire bonders, and test equipment shifts from single-month improvement to a sustained trend.
• China sales disclosures in subsequent quarters from Applied Materials, Lam Research, Tokyo Electron, ASML, and KLA.