China's July SPE imports reached a monthly high for the year, regional demand remained divergent, and Japan regained its position as the largest export source

Overview

The report analyzes China's July 2026 semiconductor production equipment import data across three dimensions: region, equipment type, and export source. UBS believes that although YTD imports remain lower and regional demand is clearly divergent, total imports and imports of both lithography and non-lithography equipment reached monthly highs for the year in July. Memory and advanced logic capacity expansion, together with the localization trend, continue to support leading Chinese wafer fabrication equipment companies.

Core views

China's semiconductor production equipment (SPE) imports reached US$3.4bn in July, up 3% YoY and 16% MoM, marking the highest monthly level of 2026. Demand was concentrated mainly in Shanghai: imports into Shanghai reached US$1.8bn, up 74% YoY and 34% MoM, accounting for 54% of the national total, which the report attributes to simultaneous capacity expansion in memory and advanced logic. Beijing accounted for 11% of the national total, with imports up 64% YoY and 31% MoM. Sichuan, Jiangsu, Zhejiang, and Guangdong accounted for 6%, 5%, 5%, and 4%, respectively. Sichuan corresponds to the Huali Chengdu fab, while Jiangsu may correspond to the Hua Hong Wuxi fab. Liaoning and Shaanxi contributed a combined 9%, and UBS believes the SK Hynix Dalian fab and Samsung Xi'an fab located there may have begun a new round of memory capacity expansion. Cumulative data still indicate divergent demand. SPE imports totaled US$17.15bn in the first seven months of 2026, down 8% YoY, though the decline narrowed further from 10% in the first six months. The cumulative decline was driven mainly by an equipment digestion period in Guangdong, where imports fell to US$1.5bn in the first seven months, down 76% YoY. Import demand in Hubei and Anhui has been weak YTD; these two regions are home primarily to the fabs of Yangtze Memory Technologies and ChangXin Memory Technologies. However, the companies' capacity expansion plans lead UBS to believe demand in both regions may catch up soon. Therefore, the current import recovery is not a synchronized rebound across all regions but is being led by Shanghai, Beijing, and certain regions undergoing new capacity expansion. By equipment type, lithography equipment imports reached US$0.9bn in July, up 7% YoY, while non-lithography equipment imports reached US$2.6bn, up 1% YoY. Both recorded their highest monthly levels of the year, well above their respective monthly averages of US$0.5bn and US$1.8bn in the first half of 2026. These data indicate that the improvement in imports was not driven solely by a single equipment category, as non-lithography equipment was also catching up. By export source, Japan regained its position as China's largest SPE export source in July, with exports up 20% YoY and accounting for 28% of China's total imports. Singapore increased 33% YoY and accounted for 25%, which the report believes primarily reflects US equipment suppliers; the Netherlands increased 8% YoY and accounted for 24%. For dry etching equipment, imports from Japan reached US$337m, mainly corresponding to TEL, significantly higher than the US$124m imported from Malaysia, which mainly corresponds to Lam. UBS believes this difference may be related to demand from Chinese memory customers. For deposition equipment, Singapore accounted for 69% of total imports, mainly corresponding to AMAT. Demand for lithography equipment remained solid, with every region importing equipment from the Netherlands in July. Shanghai, Beijing, and Zhejiang imported 6, 3, and 2 lithography systems, respectively, with average selling prices per system of US$77m, US$48m, and US$58m, respectively. Guangdong, Jilin, Sichuan, Jiangsu, and Shaanxi imported a combined US$95m. Import volumes and unit prices together show that Shanghai led not only in quantity but also in equipment value, consistent with its memory and advanced logic capacity expansion activities. In terms of stock performance, since technology stock volatility began in July, NAURA, AMEC, and ACMR have fallen by an average of 24%, less than the 30% decline in the China Semiconductor Index but more than the 18% decline in the SOX Index. UBS therefore believes that major Chinese wafer fabrication equipment stocks offer some downside protection and continues to name NAURA and AMEC as its most preferred companies within its China technology semiconductor coverage. Its core rationale is based on two structural drivers: capacity expansion at memory and advanced logic fabs and accelerating equipment localization. UBS values NAURA and AMEC using P/E multiples, but the provided report content does not disclose the specific multiples, ratings, or target prices. Industry downside risks listed in the report include a weaker-than-expected macroeconomic environment and end demand, escalating geopolitical tensions and broader restrictions, a longer-than-expected industry downturn, project suspensions or capital expenditure cuts by Chinese fabs exceeding estimates, and slower-than-expected R&D progress. Conversely, actual results could exceed UBS's expectations if end demand recovers faster, geopolitical tensions ease and restrictions are removed, the downturn is shorter, fab capital expenditure is more aggressive, or Chinese equipment manufacturers achieve technological breakthroughs and significantly increase their market shares. NAURA also faces the risk of market share losses due to intensifying competition in its etching, deposition, and cleaning businesses. AMEC additionally faces risks from declining etching market share, delayed new product development, and departures of key management and R&D personnel.

Analysis framework

UBS first compares the YoY and MoM changes in July SPE imports and the YTD trend, then identifies potential fab capacity expansion activities by province and municipality. It subsequently separates lithography from non-lithography equipment and uses exporting countries, equipment categories, import volumes, and average selling prices to infer major suppliers and customer demand. Finally, the report connects import and capacity expansion signals with the equipment localization trend, the relative performance of related stocks, and a P/E multiple valuation methodology to form its view on leading Chinese WFE companies.

Methodology notes

• Industry/Sector Analysis FrameworkSupply-demand framework

  Using changes in equipment imports to observe fab equipment demand

  The report uses SPE import value, regional distribution, and YoY and MoM changes as indicators of equipment installation and fab capacity expansion demand to assess differences in business conditions across regions and equipment categories.

• Industry/Sector Analysis FrameworkUpstream-Midstream-Downstream Industry Chain Transmission

  Mapping equipment suppliers and fabs based on export sources and import regions

  The report links equipment exports from Japan, Singapore, the Netherlands, and Malaysia to suppliers such as TEL, AMAT, and Lam, while matching imports by Chinese provinces and municipalities with local memory or logic fab capacity expansion activities.

• Industry/Sector Analysis FrameworkVolume-price decomposition

  Analysis of lithography equipment import volumes and average selling prices

  The report presents both lithography equipment import volumes and average selling prices per system for Shanghai, Beijing, and Zhejiang to distinguish the contributions of equipment quantity and price to changes in import value.

• Valuation MethodPE/PEG valuation

  P/E multiple valuation

  UBS explicitly states that it values NAURA and AMEC using P/E multiples; the provided content does not disclose the specific multiples or the resulting target prices.

Asset mapping & comparison

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

• NAURA

  UBS names it as one of its most preferred companies within its China technology semiconductor coverage and believes it benefits from memory and advanced logic capacity expansion and accelerating localization.

  Strengths

  Structural fab capacity expansion and the equipment localization trend provide support for demand and market share.

  Comparison

  Together with AMEC, it is one of UBS's most preferred Chinese WFE companies; NAURA, AMEC, and ACMR have fallen by an average of 24% since July, outperforming the China Semiconductor Index's 30% decline.

  Risks

  Broader geopolitical restrictions, weaker-than-expected Chinese WFE demand, and intensifying competition in the etching, deposition, and cleaning businesses leading to market share losses.

• AMEC

  UBS names it as one of its most preferred companies within its China technology semiconductor coverage and believes it benefits from fab capacity expansion and accelerating localization.

  Strengths

  Memory and advanced logic capacity expansion and equipment localization constitute structural growth drivers.

  Comparison

  Together with NAURA, it is one of UBS's most preferred Chinese WFE companies and is included in the relative downside-resilience comparison of three major equipment stocks.

  Risks

  Broader geopolitical restrictions, weaker-than-expected Chinese WFE demand, declining etching market share, longer-than-expected new product development timelines, and departures of key management and R&D personnel.

• ACMR

  The report includes it in a performance comparison of major Chinese WFE stocks during the period of technology stock volatility.

  Comparison

  Together with NAURA and AMEC, it has fallen by an average of 24% since July, while the China Semiconductor Index and SOX Index declined 30% and 18%, respectively, over the same period.

  Risks

  Industry risks listed in the report include changes in demand, capital expenditure, geopolitics, the industry cycle, and R&D progress.

Key data

• China's July SPE importsUS$3.4bnUp 3% YoY and 16% MoM, marking the highest monthly level in 2026
• Shanghai's July SPE importsUS$1.8bnUp 74% YoY and 34% MoM, accounting for 54% of total national imports
• Beijing's share of July SPE imports11%Import value increased 64% YoY and 31% MoM
• Shares of other major import regionsSichuan 6%, Jiangsu 5%, Zhejiang 5%, Guangdong 4%Reflecting equipment installation activities across multiple regions
• Liaoning and Shaanxi's share of SPE imports9%The report believes this may correspond to a new round of memory capacity expansion at the SK Hynix Dalian fab and Samsung Xi'an fab
• SPE imports in the first seven months of 2026US$17.15bnDown 8% YoY, narrowing from the 10% decline in the first six months
• Guangdong's SPE imports in the first seven monthsUS$1.5bnDown 76% YoY, the primary reason for the decline in cumulative imports
• July imports of lithography and non-lithography equipmentUS$0.9bn, US$2.6bnUp 7% and 1% YoY, respectively, both marking monthly highs for the year; first-half monthly averages were US$0.5bn and US$1.8bn, respectively
• Major equipment export sources in JulyJapan 28%, Singapore 25%, the Netherlands 24%Export values increased 20%, 33%, and 8% YoY, respectively, with Japan being the largest source
• July dry etching equipment importsJapan US$337m, Malaysia US$124mThe report primarily maps these to TEL and Lam, respectively, and believes the difference may stem from demand among Chinese memory customers
• Singapore's share of deposition equipment imports69%The report primarily maps this to AMAT
• Lithography equipment imports in major regionsShanghai 6 systems, Beijing 3 systems, Zhejiang 2 systemsAverage selling prices per system were US$77m, US$48m, and US$58m, respectively; the other five regions imported a combined US$95m
• Performance of related stocks and indicesNAURA/AMEC/ACMR average -24%; China Semiconductor Index -30%; SOX Index -18%The measurement period covers the technology stock volatility phase since July

Impact & implications

The report believes the July import rebound indicates that equipment demand from Chinese fabs is improving, but the recovery displays clear differences by region and customer structure and is currently driven mainly by Shanghai, Beijing, and certain memory capacity expansion regions. Lithography and non-lithography equipment both reaching new highs for the year and Japan regaining its position as the largest export source also indicate that overseas equipment procurement remains active. For domestic Chinese equipment companies, UBS believes memory and advanced logic capacity expansion supports demand, while accelerating localization provides structural market share opportunities. It therefore continues to prefer NAURA and AMEC, although actual delivery will still depend on fab capital expenditure, technological R&D progress, the competitive landscape, and the geopolitical environment.

Risks

• The macroeconomy and end demand may be weaker than expected.
• Geopolitical tensions may intensify, and related restrictions may broaden further.
• The semiconductor industry downturn may last longer than expected.
• Chinese fabs may suspend projects or cut capital expenditure below UBS's estimates.
• R&D progress at Chinese WFE companies may be slower than expected.
• Intensifying competition may cause NAURA to lose market share in its etching, deposition, and cleaning businesses and AMEC to lose market share in its etching business.
• AMEC also faces risks from longer-than-expected new product development timelines and departures of key management and R&D personnel.
• If end demand recovers faster, geopolitical restrictions ease, the downturn shortens, fab capital expenditure becomes more aggressive, or domestic equipment manufacturers achieve technological breakthroughs, results may exceed UBS's expectations.