China's Semiconductor Equipment Imports Hit a Monthly High for the Year in July, With Japan Regaining Its Position as the Largest Export Source

Overview

Using China's semiconductor production equipment import data for July 2026, the report analyzes the pace of wafer fab capacity expansion across domestic regions, changes in demand for different equipment categories, and the shares of major exporting countries. UBS notes that import demand remains clearly divergent, but memory and advanced logic capacity expansion in Shanghai and other regions, potential demand catch-up in certain areas, and equipment localization collectively support its positive view on leading Chinese wafer fabrication equipment companies.

Core views

China's imports of semiconductor production equipment reached US$3.4 billion in July, up 3% year over year and 16% month over month, marking the highest monthly level of 2026. Demand was concentrated primarily in Shanghai: imports reached US$1.8 billion, up 74% year over year and 34% month over month, accounting for 54% of the national total, driven by memory and advanced logic capacity expansion. Beijing accounted for 11% of the total, with imports up 64% year over year and 31% month over month. Sichuan, Jiangsu, Zhejiang, and Guangdong contributed 6%, 5%, 5%, and 4%, respectively, of national imports, with equipment installations potentially corresponding to wafer fab projects such as Huali Chengdu and Huahong Wuxi. Liaoning and Shaanxi together contributed 9%, and UBS believes overseas memory manufacturers in these regions may have begun a new round of capacity expansion. Cumulative data continue to show regional divergence. Imports from January to July 2026 totaled US$17.15 billion, down 8% year over year, although the decline narrowed further from 10% in the first half. The year-over-year decrease was mainly attributable to Guangdong absorbing equipment purchased earlier; its imports from January to July fell to US$1.5 billion, down 76% year over year. Import demand in Hubei and Anhui has been weak this year, while the expansion plans of Yangtze Memory Technologies and ChangXin Memory Technologies imply that equipment demand in these regions may catch up in the near term. Therefore, the current national data do not indicate a synchronized recovery; instead, the rebound is being led by regions such as Shanghai and Beijing, where expansion is progressing faster, while the timing of demand releases at other major manufacturing bases continues to differ. By equipment category, imports of lithography equipment reached US$0.9 billion in July, up 7% year over year, while imports of non-lithography equipment reached US$2.6 billion, up 1% year over year. Both recorded their highest monthly levels of the year and were significantly above their respective monthly averages of US$0.5 billion and US$1.8 billion in the first half of 2026. This indicates that the import recovery is not being driven solely by lithography equipment; demand for non-lithography equipment is also catching up. Dutch lithography equipment maintained solid demand across regions: Shanghai, Beijing, and Zhejiang imported 6, 3, and 2 units, respectively, at average prices per unit of US$77 million, US$48 million, and US$58 million; Guangdong, Jilin, Sichuan, Jiangsu, and Shaanxi imported a combined US$95 million. Shares by export source also changed. Japan's equipment exports to China rose 20% year over year in July and accounted for 28% of total imports, making it the largest export source again; Singapore rose 33% year over year and accounted for 25%, which the report believes primarily reflects shipments from US equipment suppliers; the Netherlands rose 8% year over year and accounted for 24%. For etching equipment, imports from Japan totaled US$337 million, mainly corresponding to Tokyo Electron, significantly exceeding the US$124 million imported from Malaysia, mainly corresponding to Lam Research. UBS believes this may have been driven by demand from Chinese memory customers. For deposition equipment, Singapore-sourced products, mainly corresponding to Applied Materials, accounted for 69% of total imports in the category. These data indicate that Japan's recovering share in etching and other non-lithography equipment was an important reason it regained its position as the largest export source. From a capital-markets perspective, since technology stocks became volatile in July, the average share-price decline of NAURA, AMEC, and ACM Research Shanghai has been 24%. This provided some downside protection relative to the 30% decline in the China Semiconductor Index but underperformed the 18% decline in the Philadelphia Semiconductor Index. UBS continues to regard NAURA and AMEC as its top picks within its China technology semiconductor coverage, as memory and advanced logic wafer fab expansion continues to provide structural support for equipment demand while localization is accelerating. The report's positive view on leading Chinese equipment companies is based primarily on the two long-term drivers of capacity expansion and import substitution, rather than on the belief that import demand has already improved synchronously across all regions.

Analysis framework

UBS first compares China's semiconductor equipment imports by month in year-over-year and month-over-month terms, then identifies equipment installation activity and potential wafer fab projects by province and city. It subsequently separates lithography from non-lithography equipment and further examines categories such as etching and deposition, as well as the shares of exporting countries. Finally, the report maps import demand, wafer fab capacity expansion, and localization trends to the relative performance of Chinese equipment companies and its investment views, using price-to-earnings multiples to value NAURA and AMEC.

Methodology notes

• Industry/Sector Analysis FrameworkSupply-demand framework

  Using equipment imports to assess wafer fabrication equipment demand

  The report uses regional and monthly changes in semiconductor equipment imports as indicators of wafer fab capacity expansion and equipment installation demand, combining them with known project locations to explain demand strength and potential subsequent catch-up.

• Industry/Sector Analysis FrameworkVolume-price decomposition

  Breaking down lithography demand by equipment category, import volume, and average price per unit

  The report not only compares import values for lithography and non-lithography equipment but also lists lithography equipment volumes and average prices per unit in Shanghai, Beijing, and Zhejiang to identify differences in regional demand scale and equipment value.

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

  Transmission from wafer fab capacity expansion and localization to domestic equipment manufacturers

  The report believes that memory and advanced logic wafer fab capacity expansion will generate equipment demand, while accelerating localization will further expand market opportunities for leading Chinese equipment manufacturers.

• Valuation MethodPE/PEG valuation

  Price-to-earnings multiple valuation

  UBS explicitly uses price-to-earnings multiples to value NAURA and AMEC, but the input does not disclose specific multiples or target prices.

Asset mapping & comparison

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

• NAURA

  UBS names it as a top equipment company within its China technology semiconductor coverage and believes it will benefit from memory and advanced logic wafer fab capacity expansion and equipment localization.

  Strengths

  It has a presence in the wafer fabrication equipment business and is regarded by the report as one of the primary beneficiaries of capacity expansion and localization trends.

  Weaknesses

  Its etching, deposition, and cleaning businesses may face intensifying competition and market-share losses.

  Comparison

  The combined average period decline with AMEC and ACM Research Shanghai was 24%, better than the 30% decline in the China Semiconductor Index but worse than the 18% decline in the Philadelphia Semiconductor Index.

  Risks

  Geopolitical tensions and expanding restrictions, weaker-than-expected Chinese equipment demand, and intensifying competition in etching, deposition, and cleaning businesses.

• AMEC

  UBS names it as a top equipment company within its China technology semiconductor coverage and believes memory and advanced logic capacity expansion and localization will provide structural support.

  Strengths

  It is well positioned to benefit from the localization trend in domestic wafer fabrication equipment and is supported by equipment demand from Chinese memory customers.

  Weaknesses

  Its etching business faces competition and market-share risks, while new-product development cycles may also be longer than expected.

  Comparison

  The combined average period decline with NAURA and ACM Research Shanghai was 24%, better than the 30% decline in the China Semiconductor Index but worse than the 18% decline in the Philadelphia Semiconductor Index.

  Risks

  Expanding geopolitical restrictions, weaker-than-expected Chinese equipment demand, loss of etching market share, delays in new-product development, and departures of key management or R&D leaders.

• ACM Research Shanghai

  The report includes it in a period-performance comparison of major Chinese equipment stocks but does not name it as a top pick.

  Strengths

  Its combined average decline with NAURA and AMEC was smaller than that of the China Semiconductor Index, demonstrating some relative downside protection.

  Weaknesses

  The report does not further discuss its company-specific operational weaknesses.

  Comparison

  The three equipment stocks fell by an average of 24% since July, compared with declines of 30% in the China Semiconductor Index and 18% in the Philadelphia Semiconductor Index.

Key data

• China's semiconductor production equipment imports in JulyUS$3.4bnUp 3% year over year and 16% month over month, marking the highest monthly level of 2026.
• Shanghai's imports in JulyUS$1.8bnUp 74% year over year and 34% month over month, accounting for 54% of the national total.
• Beijing's import share in July11%Imports rose 64% year over year and 31% month over month.
• Import shares of Sichuan, Jiangsu, Zhejiang, and Guangdong6%/5%/5%/4%Their respective shares of China's total semiconductor equipment imports in July.
• Import share of Liaoning and Shaanxi9%Their combined share of the national total, potentially reflecting a new round of capacity expansion by overseas memory manufacturers.
• Cumulative imports from January to July 2026US$17.15bnDown 8% year over year, with the decline narrowing from 10% in the first half.
• Guangdong's imports from January to JulyUS$1.5bnDown 76% year over year, the main reason for the decline in cumulative imports.
• Lithography equipment imports in JulyUS$0.9bnUp 7% year over year and above the first-half monthly average of US$0.5 billion.
• Non-lithography equipment imports in JulyUS$2.6bnUp 1% year over year and above the first-half monthly average of US$1.8 billion.
• Japan's export share in July28%Exports to China rose 20% year over year, making Japan the largest export source.
• Singapore's export share in July25%Up 33% year over year, which the report believes primarily reflects shipments from US equipment suppliers.
• The Netherlands' export share in July24%Up 8% year over year.
• Etching equipment imports from Japan and MalaysiaUS$337m/US$124mJapanese-sourced imports mainly correspond to Tokyo Electron, while Malaysian-sourced imports mainly correspond to Lam Research.
• Share of Singapore-sourced deposition equipment69%Mainly corresponding to Applied Materials.
• Lithography equipment import volumes in Shanghai, Beijing, and Zhejiang6 units/3 units/2 unitsAverage prices per unit were US$77 million, US$48 million, and US$58 million, respectively.
• Lithography equipment imports in five other regionsUS$95mCombined total for Guangdong, Jilin, Sichuan, Jiangsu, and Shaanxi.
• Period performance of equipment stocks and indices-24%/-30%/-18%Representing, respectively, the average performance of NAURA, AMEC, and ACM Research Shanghai, the China Semiconductor Index, and the Philadelphia Semiconductor Index since July.

Impact & implications

UBS believes the improvement in import data was driven mainly by certain regions and specific wafer fab projects and cannot yet be regarded as a synchronized national demand recovery. Memory and advanced logic capacity expansion in Shanghai, potential subsequent demand catch-up in Hubei and Anhui, and accelerating localization are all expected to sustain structural opportunities in Chinese equipment demand. Japan's recovering share, meanwhile, indicates that the competitive landscape among overseas equipment suppliers continues to change. Based on these factors, the report continues to favor NAURA and AMEC.

Risks

• Macroeconomic conditions and end demand may be weaker than expected.
• Geopolitical tensions may escalate, with related equipment restrictions expanding further.
• The semiconductor industry downturn may last longer than expected.
• Chinese wafer fabs may suspend projects or cut capital expenditures by more than UBS estimates.
• Chinese equipment manufacturers' R&D progress may be slower than expected.
• NAURA may lose market share due to intensifying competition in etching, deposition, and cleaning businesses.
• AMEC may face losses of etching market share, delays in new-product development, and departures of key management or R&D personnel.

What to watch

• Monitor whether equipment demand in Hubei and Anhui can catch up in the near term as Yangtze Memory Technologies and ChangXin Memory Technologies pursue their expansion plans.
• Track whether Chinese end demand, wafer fab project progress, and capital expenditures are faster or slower than UBS expects.
• Watch changes in Japan's, Singapore's, and the Netherlands' shares of equipment exports to China, as well as changes in the sourcing mix for etching and deposition equipment.
• Track whether geopolitical restrictions expand or ease and their impact on equipment supply and the localization process.
• Monitor whether Chinese equipment manufacturers can achieve technological breakthroughs and gain greater market share.
• Watch the duration of the semiconductor downturn and the pace of recovery in end demand.