China Semiconductors: May Import/Export Surges; Demand Robust, Capex Trending Up

Overview

This is a monthly data tracker report on the Greater China semiconductor industry published by Goldman Sachs Global Investment Research, focusing on core indicators for China and Taiwan from April to May 2026, including production, imports/exports, inventory, and equipment procurement. The report's core conclusion is that demand in the China semiconductor market remains robust, driven by applications such as generative AI and ADAS/autonomous driving, while local suppliers continue to expand market share and capital expenditure trends upward.

Core views

Demand Side: Apr-May data indicates sustained strong demand for Chinese semiconductors. May IC import value rose +68.0% YoY (vs. +54.7% in Apr), and export value rose +110.9% YoY to USD 35.5bn, with YTD cumulative exports up +89.8% YoY. Although import volume dipped slightly by -1.0%, average import prices soared +69.7% YoY, reflecting a higher proportion of high-value chips. Total semiconductor revenue in April rose +78.3% YoY to USD 28.9bn, continuing the high-growth trajectory seen since the start of 2026. Production Side: China's IC output in April rose +22.1% YoY to 48bn units, accelerating from March's +20.6% and significantly improving upon April 2025's +4.0%. Combined revenue for major Taiwanese semiconductor companies in May rose +26.3% YoY and +1.4% MoM, with foundry, IC design, and OSAT segments growing +1.5%, +0.9%, and +1.5% MoM respectively. Inventory & Pricing: Inventory days for China's electronics manufacturing sector stood at 61 days in April, largely flat compared to 59 days in Apr 2025, 57 days in Apr 2024, and 64 days in Apr 2023. This remains within the normal historical range, showing no signs of significant inventory buildup. The sharp rise in average import prices is primarily driven by product mix upgrades rather than simple price inflation. Equipment & Capex: Semiconductor production equipment (SPE) import value fell -4.2% YoY to USD 3.0bn in April, but test equipment import value surged +48.4% YoY to USD 57.2mn, with average prices jumping +234.9% MoM. More importantly, domestic vendor tenders remained active in June—with MCL procuring testing equipment and Runpeng Semiconductor purchasing etching consumables—confirming the upward capex trend. The report maintains its view that China's semiconductor capex will trend higher over the long term against the backdrop of "CHIPS Act 3".

Analysis framework

This report combines high-frequency macro data tracking with micro-level tender verification. At the macro level, it utilizes monthly data from the National Bureau of Statistics (production), Customs (imports/exports), and listed Taiwanese companies (revenue) to construct a three-dimensional "Production-Import/Export-Inventory" observation framework to gauge industry cycle positioning. At the micro level, it reviews tender information from domestic semiconductor manufacturers to verify the actual pace of capex deployment. Cross-validating these two approaches establishes a transmission chain from data to investment. In terms of stock selection logic, Goldman Sachs prioritizes "company-specific drivers" over industry beta, focusing on three key themes: new product ramp-up, product mix upgrades, and share gains, overlaid with thematic screening for advanced process nodes and generative AI.

Methodology notes

• Industry/Sector Analysis FrameworkSupply-demand framework

  The core of semiconductor industry analysis is tracking marginal changes on both supply and demand sides

  This report constructs a monthly tracking framework across three dimensions: production (supply), imports/exports (supply-demand gap), and inventory (supply-demand balance) to quickly identify the industry's cyclical position. When both production and import values surge simultaneously while inventory days remain stable, it indicates robust demand rather than oversupply.

• Industry/Sector Analysis FrameworkVolume-price decomposition

  Decomposing import value into Volume × Price to identify growth drivers

  The report decomposes IC import value into import volume and average import price. With May import volume down -1.0% YoY but import value up +68.0% YoY, the derived average price increase of +69.7% YoY suggests growth is primarily driven by a higher mix of high-value products rather than volume expansion. This illustrates industrial upgrade trends more effectively than looking at total value alone.

• Cycle & Sentiment FrameworkInventory cycle (Kitchin)

  Inventory days are a key indicator for determining short-cycle positioning in semiconductors

  Days of Inventory (DOI) in electronics manufacturing is a core observable variable in the Kitchin cycle. By comparing April's 61-day inventory level against the same period over the past three years, the report confirms levels are within the normal historical range, dispelling concerns of "false demand" or "inventory overhang" and providing a basis for assessing the sustainability of the upcycle.

• Competition & Strategy FrameworkMoat / competitive advantage

  Selecting alpha-generating stocks within a beta-driven market

  The report explicitly prefers stocks with "strong company-specific drivers," meaning those not solely reliant on industry tailwinds but possessing independent growth logic across new products, product mix, and market share. This reflects a stock-picking approach aimed at uncovering structural opportunities within a cyclical industry.

Asset mapping & comparison

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

• Kematek

  Rated Buy; one of the recommended picks

• SMIC (0981.HK)

  Rated Buy; 1Q26 gross margin beat expectations

  Strengths

  1Q26 gross margin outperformed expectations

• Hua Hong Semiconductor

  Rated Buy

• AMEC

  Rated Buy

• Horizon Robotics

  Rated Buy; beneficiary of ADAS/autonomous driving trends

  Strengths

  Growing demand for ADAS/autonomous driving chips

• Biren Technology

  Rated Buy; beneficiary of generative AI trends

  Strengths

  Demand for generative AI chips

• MetaX Integrated Circuits

  Rated Buy; beneficiary of generative AI trends

  Strengths

  Demand for generative AI chips

• Naura Technology

  Rated Buy

• ACMR

  Rated Buy

• Cambricon

  Rated Buy

• SICC

  Rated Buy

Key data

• China IC Output (Apr)48bn units, +22.1% YoYGrowth accelerated from Mar's +20.6%
• China IC Import Value (May)+68.0% YoYImport volume -1.0% YoY; avg import price +69.7% YoY
• China IC Export Value (May)USD 35.5bn, +110.9% YoYYTD cumulative +89.8% YoY
• Total Semiconductor Revenue (Apr)USD 28.9bn, +78.3% YoY+8.0% MoM
• Taiwan Semiconductor Companies Revenue (May)+26.3% YoY, +1.4% MoMFoundry/IC Design/OSAT MoM: +1.5%/+0.9%/+1.5% respectively
• Electronics Industry Inventory Days (Apr)61 daysLargely flat vs. recent years (Apr 2025/2024/2023 were 59/57/64 days respectively)
• Semiconductor Equipment Import Value (Apr)-4.2% YoYHowever, test equipment import value +48.4% YoY
• Lithography Machine Import Volume (Apr)55 units, -29% YoYAvg price -43% YoY to USD 2.6mn; 9 units imported from Netherlands, -40% YoY

Impact & implications

The report believes that Apr-May Greater China semiconductor data validates the sustainability of the industry upcycle, with demand in the China market remaining strong driven by applications such as generative AI and ADAS/autonomous driving. The significant increase in average import prices alongside surging output implies that domestic industrial upgrading and self-sufficiency efforts are advancing in tandem—requiring imports of more high-end products while domestic capacity expands rapidly. Divergence in equipment imports (slight overall decline vs. surge in test equipment) and active vendor tenders suggest the capex cycle has not yet peaked, positioning local supply chain companies to benefit continuously. Meanwhile, steady revenue growth among Taiwanese semiconductor firms indicates strengthening synergies across the Greater China semiconductor supply chain. Goldman Sachs maintains a positive outlook on the China semiconductor industry, believing that advanced process nodes and generative AI will drive development across multiple segments including IP, design, foundry, advanced packaging, and equipment.

What to watch

• Subsequent tenders and capex deployment progress of domestic semiconductor manufacturers
• Sustainability of demand for generative AI and ADAS/autonomous driving
• Progress in advanced node capacity expansion and yield improvement
• Changes in import restrictions on critical equipment such as lithography machines