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China WFE imports rebounded notably month over month in June, but are still down about 10% year to date

Institution
Bernstein
Date
2026-07-21
Authors
Qingyuan Lin, Ph.D., Stacy A. Rasgon, Ph.D., David Dai, CFA, Kai Zhang, Francis Ma, Alrick Shaw, Arpad von Nemes, Carmine Milano, CFA, Juho Hwang, Jack Lin
Company
Global Semiconductor Capital Equipment
Ticker
ASML, LRCX, AMAT, KLAC, 8035.JP, 6525.JP, 7735.JP, 6857.JP, 688012.CH, 002371.CH, 688072.CH
Industry
semiconductor equipment
Rating
mixed; mostly Outperform
BullishMedium confidenceChina WFE imports recovered in June and Bernstein expects stronger 2H imports, especially from memory WFE, while company-level implications differ by vendor.
AuthorsQingyuan Lin, Ph.D., Stacy A. Rasgon, Ph.D., David Dai, CFA, Kai Zhang, Francis Ma, Alrick Shaw, Arpad von Nemes, Carmine Milano, CFA, Juho Hwang, Jack Lin
Asset classesEquity
Business segmentswafer fabrication equipment、lithography、dry etch、deposition、process control、cleaning、semiconductor test
Research firm divisions/subsidiariesBernstein（Other）

AI summary card

China WFE imports rebounded notably month over month in June, but are still down about 10% year to date

Bernstein tracks China customs WFE import data and believes June imports returned to roughly flat year over year, with further recovery likely in 2H as memory WFE imports strengthen.

In the report's coverage table, NAURA, AMEC, Piotech, Tokyo Electron, Kokusai, Advantest, AMAT, LRCX, KLAC, and ASML are rated Outperform; Screen is rated Market-Perform.
semiconductor equipmentChina WFE importslithography equipmentmemory capital expenditureASMLLRCXAMATKLACTEL
  • China WFE imports were about US$3.4 billion in June, up 57% month over month and about 1% year over year, slightly above the 2025 monthly average of US$3.2 billion.
  • 2026 year-to-date imports were about US$16.0 billion, down 10% year over year, mainly dragged by an 18% year-over-year decline in lithography equipment and a 14% year-over-year decline in dry etch.
  • June lithography imports were about US$842 million, turning positive year over year and recovering from the April low, but Q2 was still down 24% quarter over quarter and 9% year over year.
  • By regional mix, the combined share of the United States, Malaysia, and Singapore increased, the Netherlands' share declined versus 2025, and Japan's share was relatively stable; excluding lithography, the import shares of Singapore and Malaysia continued to rise.
  • Regression analysis shows differentiated company impacts: AMAT, KLAC, TEL, and Kokusai may see quarter-over-quarter growth in China revenue, while LRCX, Screen, and Advantest may face quarter-over-quarter pressure.

Report interpretation

Overview

This report is Bernstein's monthly tracking of China wafer fabrication equipment imports, based on China customs data updated through June 2026. The report focuses on total WFE, lithography, dry etch, deposition, process control, and other equipment categories, as well as changes in import shares by source region, and uses import data to run regression estimates of China revenue for companies such as ASML, LRCX, AMAT, KLAC, TEL, Kokusai, Screen, and Advantest.

Core views

The core view is that China WFE imports are gradually recovering: June monthly imports reached US$3.4 billion, rising sharply month over month and broadly flat year over year, though year-to-date imports remain down year over year due to weakness in lithography and dry etch. Bernstein expects imports to improve in the second half, mainly driven by stronger demand for memory WFE. At the company level, ASML's China revenue mix is still likely to decline versus 2025, but China demand should remain resilient over the next few years; China revenue readings for AMAT, KLAC, TEL, and Kokusai are relatively positive, while quarter-over-quarter signals for LRCX, Screen, and Advantest are weaker.

Analysis framework

The report uses monthly China customs import data, broken down by equipment type and trading partner region, to observe total volume, year-over-year and month-over-month changes, year-to-date trends, and share migration; it then conducts two-month or three-month correlation and regression analysis between relevant equipment import data and companies' historical China revenue to estimate corresponding quarterly China revenue and revenue mix, and compares the results with company management commentary and consensus expectations.

Methodology notes

  • macro and industry data trackingChina WFE import tracking

    Observe the strength of China's semiconductor equipment demand through monthly China customs WFE import data.

    The data are split by equipment type and source region, including lithography, dry etch, deposition, process control, cleaning, and other equipment, and are used to assess demand recovery, share changes, and import structure in the context of domestic substitution.

  • company revenue forecastingimport data regression model

    Run regressions between relevant import series and equipment companies' China revenue to infer quarterly China revenue and revenue mix.

    ASML uses three months of lithography import data, with the report disclosing an R² of about 0.95; LRCX, KLAC, TEL, and others use three-month correlations, while AMAT uses two-month correlations, combined with consensus total revenue to estimate China revenue mix.

Asset mapping & comparison

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

  • ASML
    China lithography imports are highly correlated with ASML's China system revenue.
    Strengths
    Regression R² is about 0.95, and the report believes expansion in advanced logic capacity and DUV capacity in China supports medium-term demand.
    Weaknesses
    Q2 China system sales mix fell to 14%, below the FY25 revenue mix backdrop of 33%.
    Comparison
    The regression estimates Q2 China sales at EUR 1.02 billion, slightly above the actual disclosed EUR 919 million.
    Risks
    Export controls, volatility in lithography imports, and a declining China revenue mix.
  • LRCX
    Relevant import data point to a quarter-over-quarter decline in Jun-Q China revenue.
    Strengths
    Benefits from key technology inflection points such as GAA, advanced packaging, HBM, and NAND upgrades.
    Weaknesses
    The report estimates China revenue down about 24% quarter over quarter, with China revenue mix falling to about 23%.
    Comparison
    Directionally consistent with management's comments on declining China exposure quarter over quarter.
    Risks
    Shrinking China exposure and weakness in related equipment imports.
  • AMAT
    Two-month correlation points to quarter-over-quarter growth in Jul-Q China revenue.
    Strengths
    Strong exposure to key technology inflection points, with valuation relatively attractive versus peers.
    Weaknesses
    The company did not provide Jul-Q China revenue guidance, so the regression signal still needs validation.
    Comparison
    The report estimates China revenue up about 29% quarter over quarter, with China revenue mix at about 30%.
    Risks
    China business growth falling short of the regression model and changes in equipment import structure.
  • KLAC
    Three-month correlation points to quarter-over-quarter growth in Jun-Q China revenue.
    Strengths
    Has structural growth drivers, a solid competitive position, and relatively low China substitution risk.
    Weaknesses
    Management did not provide China revenue exposure guidance for the current quarter.
    Comparison
    The report estimates China revenue up about 23% quarter over quarter, with China revenue mix at about 28%.
    Risks
    China WFE growing more slowly than overall WFE and volatility in process control demand.
  • Tokyo Electron
    China import data point to quarter-over-quarter growth in TEL China SPE revenue.
    Strengths
    A major global SPE supplier and the largest SPE supplier in Japan, covering multiple product categories.
    Weaknesses
    The report says the predictive power of the three-month correlation is limited.
    Comparison
    The report estimates China revenue up about 19% quarter over quarter, implying China revenue mix of about 30%.
    Risks
    Yen movements, competitive pricing, and mapping error between import data and revenue.
  • Kokusai
    Regression shows China revenue may increase significantly quarter over quarter.
    Strengths
    Batch ALD has room for increased adoption in advanced nodes and NAND, and the recovery in NAND capital expenditure is accelerating.
    Weaknesses
    Estimated China contribution is high, which may amplify volatility from a single region.
    Comparison
    The report estimates China revenue up about 37% year over year and about 86% quarter over quarter, with China contributing about 44%.
    Risks
    A weaker-than-expected NAND recovery and volatility in China orders.
  • Screen
    Regression shows China revenue may decline significantly quarter over quarter.
    Strengths
    Potential upside from panel-level packaging is worth watching.
    Weaknesses
    Cleaning intensity has not improved, and the company faces competition from TEL, Lam, and Chinese vendors.
    Comparison
    The report estimates China revenue down about 45% year over year and about 71% quarter over quarter, below the pace implied by consensus expectations.
    Risks
    Intensifying competition in cleaning equipment and declining China sales.
  • Advantest
    Regression shows China revenue up year over year but down quarter over quarter.
    Strengths
    Benefits from higher testing intensity for HBM and Blackwell, with strong share in HBM testers and Nvidia AI GPU testing.
    Weaknesses
    The report estimates China revenue down about 13% quarter over quarter, implying downside risk to consensus expectations.
    Comparison
    The report estimates China contribution at about 15%.
    Risks
    Volatility in China testing demand and AI/HBM timing coming in below expectations.
  • NAURA, AMEC, Piotech
    Beneficiaries of China WFE domestic substitution.
    Strengths
    NAURA has a broad product line, AMEC has strong technology recognition, and Piotech is expanding in deposition and advanced packaging equipment.
    Weaknesses
    Valuations are high and continued delivery of share gains is required.
    Comparison
    All are rated Outperform in the report, with target prices of CNY 680, CNY 500, and CNY 580, respectively.
    Risks
    The pace of domestic substitution, customer qualification, competition, and the industry capex cycle.

Key data

  • June China WFE importsUS$3.4 billionUp 57% month over month and about 1% year over year, slightly above the 2025 monthly average of US$3.2 billion.
  • 2026 year-to-date China WFE importsUS$16.0 billionDown 10% year over year, mainly dragged by lithography and dry etch.
  • June lithography importsUS$842 millionUp about 3% year over year, continuing to recover from the historical low in April.
  • 2026 year-to-date lithography importsUS$2.98 billionDown 18% year over year, one of the main drags on weaker total imports year to date.
  • ASML Q2 China system sales estimateEUR 1.02 billionThe regression model estimates a 14% quarter-over-quarter decline and a 32% year-over-year decline, above ASML's actual disclosed figure of EUR 919 million.
  • LRCX China revenue estimateUS$1.522 billionThe report estimates Jun-Q China revenue down about 24% quarter over quarter, with China revenue mix at about 23%.
  • AMAT China revenue estimateUS$2.682 billionThe report estimates Jul-Q China revenue up about 29% quarter over quarter, with China revenue mix at about 30%.
  • KLAC China revenue estimateUS$1.021 billionThe report estimates Jun-Q China revenue up about 23% quarter over quarter, with China revenue mix at about 28%.
  • TEL China SPE revenue estimateJPY 227.0 billionThe report estimates 2QCY26 China revenue up about 19% quarter over quarter, with China SPE revenue mix at about 30%.
  • Kokusai China revenue estimateJPY 32.0 billionThe report estimates quarter-over-quarter growth of about 86%, with China contributing about 44%.

Impact & implications

From an investment perspective, the recovery in China WFE imports supports improving semiconductor equipment demand in 2H, but differences in import structure and company exposure lead to diverging single-stock signals. Domestic equipment makers NAURA, AMEC, and Piotech benefit from China WFE domestic substitution and share gains; among global equipment companies, ASML's China revenue mix is declining but demand remains resilient, while regression readings for AMAT, KLAC, TEL, and Kokusai are relatively positive, and short-term quarter-over-quarter China revenue signals for LRCX, Screen, and Advantest are weaker.

Risks

  • China WFE import recovery falls short of expectations, especially if memory WFE demand in 2H is weaker than expected.
  • Export controls, supply shortages, or trade policy changes affect imports of lithography and other critical equipment.
  • There are timing differences, product mapping errors, and regional transshipment effects between import data and company-recognized revenue.
  • A declining China revenue mix may pressure revenue and valuations for some global equipment suppliers.
  • Domestic substitution and global supply-chain shifts may change the regional sources of imports, weakening historical regression relationships.

What to watch

  • Whether subsequent monthly total China WFE imports remain above the 2025 monthly average level.
  • Whether lithography imports continue recovering from the April low, and how the Netherlands' share in lithography imports changes.
  • Whether memory-related WFE imports strengthen meaningfully in 2H.
  • Whether the combined share of the United States, Malaysia, and Singapore continues to rise, and whether this reflects production-location migration by U.S. suppliers.
  • Differences between regression estimates and subsequently disclosed China revenue in the earnings reports of ASML, LRCX, AMAT, KLAC, TEL, Kokusai, Screen, and Advantest.
  • Order trends, share gains, and customer expansion progress for Chinese domestic equipment makers NAURA, AMEC, and Piotech.
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