Greater China semiconductors Report Interpretation

Overview

This industry update assesses Greater China semiconductor momentum using July–August production, trade, revenue, inventory and equipment-procurement data. Goldman Sachs concludes that demand remains solid and maintains a positive view of the China semiconductor trend, supported by generative AI, ADAS/AD adoption, local supplier share gains and rising capital-expenditure plans.

Core views

Goldman Sachs interprets the July–August data as evidence that China semiconductor demand remains solid. IC production rose 20.7% year on year to 53 billion units in July 2026, accelerating from 18.8% in June and 15.0% in July 2025. China semiconductor revenue rose 127.7% year on year and 2.9% month on month to US$38.2 billion in July, compared with 115.1% year-on-year growth in June. The report links this momentum to generative AI, ADAS/AD demand in China, and domestic suppliers' expanding market share alongside larger capex plans. Trade data show especially strong value growth. In August, IC import volume increased 6.7% year on year, down from 8.5% in July, while import value increased 83.6%, up from 71.1% in July. Goldman Sachs calculates that the gap implied a 72.1% year-on-year increase in import ASP. IC export value rose 129.8% year on year and 5.1% month on month to US$40.7 billion; year-to-date export value reached US$256.8 billion, up 104% year on year. In contrast, August export volume fell 7.9% year on year and 5.1% month on month to 30.7 billion units, while year-to-date volume was 242.4 billion units, up 4% year on year. The value-versus-volume divergence underscores the report's emphasis on stronger pricing or mix rather than unit growth alone. The report also notes elevated inventory in electronics manufacturing: China sector days of inventory were 66 days in July 2026, above 57, 58 and 57 days in July 2025, 2024 and 2023, respectively. This inventory comparison is presented alongside the otherwise solid demand indicators rather than as a changed industry conclusion. Across Taiwan, aggregate revenue for major listed semiconductor companies increased 48.9% year on year and 11.0% month on month in August, accelerating from 39.4% year-on-year growth in July and 22.0% in August 2025. By segment, August revenue rose 9.8% month on month for foundries, 20.3% for IC design and 10.1% for OSAT, adding evidence of broad activity across the semiconductor supply chain. Equipment data are mixed in the near term but remain consistent with the firm's longer-term capex view. Semiconductor production equipment import value fell 3.2% year on year but rose 7.7% month on month to US$4.0 billion in July. Test-equipment import value rose 45.3% year on year and 43.8% month on month to US$66.3 million, with ASP up 6.1% month on month to US$38,000. Lithography import volume rose 2% year on year to 63 units and ASP rose 5% to US$13.8 million; imports from the Netherlands rose 24% to 21 units while their ASP declined 13% to US$38.8 million. Goldman Sachs further highlights continuous September bidding activity, including deposition-equipment orders from Runpeng Semiconductor and chip-sorting-equipment bids from Echip Semi, as support for an upward China semiconductor capex trend in coming years. Within this backdrop, Goldman Sachs continues to prefer stocks with company-specific catalysts, specifically new-product ramp-ups, product-mix upgrades and market-share gains. It identifies advanced-node development and generative AI as supports across IP, design, foundry, advanced packaging and semiconductor production equipment, and lists Kematek, SMIC, Hua Hong, AMEC, Horizon Robotics, Biren, MetaX, Naura, ACMR and Cambricon as Buy-rated names.

Analysis framework

The report combines official China production and customs statistics, company revenue data, Taiwan semiconductor revenue aggregates, inventory days and equipment-import indicators. It compares year-on-year and month-on-month changes, separates volume from value to infer average selling price movements, and uses recent procurement bids as evidence on semiconductor capital-expenditure activity.

Methodology notes

• Industry AnalysisSupply-demand framework

  Semiconductor demand and capacity assessment using production, trade, revenue, inventory and equipment procurement data.

  Goldman Sachs uses changes in IC output, imports, exports, sector inventory and equipment bids to judge current demand strength and the direction of future industry investment.

• Industry AnalysisVolume-price decomposition

  Separating IC import and export value changes from volume changes to infer ASP movements.

  The report notes that August import value growth materially exceeded volume growth, implying a 72.1% year-on-year increase in import ASP and highlighting the role of pricing or product mix.

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Assessment across IP, design, foundry, advanced packaging and semiconductor production equipment.

  The report connects end-demand drivers such as generative AI and ADAS/AD with activity across semiconductor supply-chain segments and equipment spending.

Asset mapping & comparison

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

• SMIC (0981.HK)

  Buy-rated China semiconductor foundry; the report notes a 2Q26 beat.

  Strengths

  Included in Goldman Sachs' Buy list amid positive China semiconductor and capex trends.

• Hua Hong (688347.SH / 1347.HK)

  Buy-rated foundry and an identified participant in recent equipment procurement.

  Strengths

  Included in Goldman Sachs' Buy list; recent procurement activity includes equipment for 8-inch and 12-inch IC manufacturing projects.

• Kematek, AMEC, Horizon Robotics, Biren, MetaX, Naura, ACMR and Cambricon

  Buy-rated names identified by Goldman Sachs within its China semiconductor preference list.

  Strengths

  The report favors company-specific drivers including new-product ramp-ups, mix upgrades and share gains.

Key data

• China IC production53 billion units; +20.7% YoY in July 2026Growth accelerated from +18.8% in June 2026 and compared with +15.0% in July 2025.
• China semiconductor revenueUS$38.2 billion; +127.7% YoY and +2.9% MoM in July 2026Compared with +115.1% year-on-year growth in June 2026.
• IC import value+83.6% YoY in August 2026Versus +71.1% in July; import volume rose 6.7%, implying a +72.1% YoY import ASP increase.
• IC export valueUS$40.7 billion; +129.8% YoY and +5.1% MoM in August 2026Year-to-date 2026 export value was US$256.8 billion, up 104% year on year.
• IC export volume30.7 billion units; -7.9% YoY and -5.1% MoM in August 2026Year-to-date volume was 242.4 billion units, up 4% year on year.
• China electronics inventory days66 days in July 2026Above 57, 58 and 57 days in July 2025, 2024 and 2023, respectively.
• Taiwan semiconductor aggregate revenue+48.9% YoY and +11.0% MoM in August 2026Foundry, IC design and OSAT revenue grew 9.8%, 20.3% and 10.1% month on month, respectively.
• Semiconductor test-equipment importsUS$66.3 million; +45.3% YoY and +43.8% MoM in July 2026Import ASP increased 6.1% month on month to US$38,000.

Impact & implications

Goldman Sachs views the data as supportive of a continued China semiconductor expansion, with higher-value IC trade, production growth, Taiwan revenue momentum and fresh equipment bids reinforcing its positive industry stance. The firm favors companies whose own catalysts include product ramps, richer mix and market-share gains, while identifying advanced nodes and generative AI as development supports across the supply chain.