China WFE imports are down 13% YTD, with lithography supply constraints the main drag
AI summary card
China WFE imports are down 13% YTD, with lithography supply constraints the main drag
Bernstein tracks China customs WFE import data and believes the 12% month-over-month decline in April and the 13% YTD decline are mainly due to weak lithography imports, rather than a broad cooling in China semiconductor equipment demand.
- China WFE imports in April were US$2.7bn, down 12% MoM and 3% YoY; YTD imports were about US$10.0bn, down 13% YoY.
- Lithography imports in April were only about US$142mn, down 60% YoY; YTD lithography imports were US$1.85bn, down 27% YoY, making them the key reason for the weak overall data.
- Excluding lithography, April WFE imports rose 15% MoM and 5% YoY, showing resilience in other equipment categories.
- ASML-related Dutch lithography imports fell to EUR 87mn in April, and the report estimates its China system sales in the relevant quarter may have dropped to EUR 0.44bn, with China revenue contribution declining to 7%.
- Regionally, the combined share of imports from the United States, Malaysia, and Singapore rose, reaching 44% YTD in 2026, reflecting changes in the supply-chain shipment route.
Report interpretation
Overview
This report is Bernstein's monthly tracker of China wafer fabrication equipment (WFE) imports, based on China customs data. It updates the April 2026 data and uses import data and regression models to infer changes in China revenue for major global semiconductor equipment companies. The conclusion is that China WFE imports are down 13% YoY YTD in 2026, and the apparent weakness is mainly caused by lithography imports being held back by supply constraints, rather than a broad slowdown in China WFE demand.
Core views
Core views include: first, April China WFE imports were US$2.7bn, below the prior year's monthly average of US$3.2bn, down 12% MoM and 3% YoY; second, lithography imports were extremely weak, at only US$142mn in April, down 60% YoY and 27% YoY YTD, creating the main drag on total imports; third, excluding lithography, April WFE imports improved both YoY and MoM, indicating that other equipment such as deposition and process control still grew; fourth, ASML's China revenue may fall sharply in the near term, but the report believes China demand remains resilient, and if DUV supply improves, ASML China revenue could come in better than guidance; fifth, the import regional mix shows the share of direct imports from the United States declining, while shipments to China from production bases such as Singapore and Malaysia are increasing.
Analysis framework
The report uses China customs WFE import data broken down by equipment type and trading-partner region, tracking total volume, YoY, MoM, regional share, and equipment-category share on a monthly basis, and regresses lithography, etch, deposition, process control, and other import data against the China revenue of companies such as ASML, LRCX, AMAT, KLAC, TEL, Kokusai, Screen, and Advantest to determine the direction of quarterly China revenue and China revenue contribution.
Methodology notes
Use China customs monthly import amounts broken down by equipment type and trading-partner region to observe changes in China WFE demand and supply constraints.
The report tracks imports including lithography, deposition, dry etch, process control, cleaning, ion implantation, and other semiconductor equipment, and pays attention to sources such as the Netherlands, the United States, Japan, Singapore, and Malaysia.
Use monthly import amounts to explain or predict quarterly China revenue for equipment companies.
The 1-month regression R² between ASML lithography imports and its China systems revenue is about 0.79; the 1-month correlation R² for LRCX and KLAC is about 0.83 and 0.84, respectively, while TEL, Kokusai, Screen, and Advantest have different predictive power.
Customs classification does not fully match Gartner's equipment taxonomy.
For example, the report believes CMP may be classified under the other equipment category, while the material removal and cleaning category does not include dry etch; the process control classification mainly covers optical equipment.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- ASML HOLDING NV (US.ASML)Core lithography equipment supplier, with import data directly used to estimate China systems sales.
- Strengths
- EUV and DUV lithography technology leadership, with the report maintaining an Outperform rating and a €1,700.00 target price and seeing DRAM expansion and higher EUV intensity as support for long-term growth.
- Weaknesses
- April Dutch lithography imports fell sharply, putting near-term pressure on China sales and China revenue mix.
- Comparison
- China revenue mix is expected to fall from 33% in FY25 to about 20% in FY26, and the report estimates the relevant quarter could account for only 7% of systems sales.
- Risks
- DUV supply constraints, export controls, monthly import volatility, and declining dependence on China revenue.
- LRCXChina import data are used to forecast Jun-Q China revenue.
- Strengths
- Benefits from key process trends such as gate-all-around, advanced packaging, HBM, and NAND upgrades.
- Weaknesses
- April data suggest Jun-Q China revenue may decline sequentially by about 28%.
- Comparison
- China revenue mix is expected to be about 22%, broadly consistent with management's comments about a sequential decline in China exposure in the June quarter.
- Risks
- Slower China WFE growth, customer capex volatility, and export restrictions.
- AMATApril import data are mainly used to validate the previously disclosed quarterly results.
- Strengths
- Exposure to key inflection points in equipment demand is relatively strong, and its valuation is attractive versus peers.
- Weaknesses
- China revenue in the April quarter was basically flat, with limited growth.
- Comparison
- The regression implies a China revenue mix of about 26.5%, versus an actual level of about 26.4%, which is consistent with the model.
- Risks
- Changes in China exposure, semiconductor capex cycles, geopolitical restrictions.
- KLACProcess-control-related import data are used to predict China revenue.
- Strengths
- Structural growth drivers, a solid competitive position, and low China substitution risk.
- Weaknesses
- Management did not provide guidance on this quarter's China revenue exposure.
- Comparison
- April data imply Jun-Q China revenue growth of about 17% QoQ, with China revenue mix around 27%.
- Risks
- China WFE growth may lag global WFE growth, and valuation premium could be affected by the cycle.
- Tokyo Electron (TEL)Import data are used to estimate China SPE revenue.
- Strengths
- The world's fourth-largest SPE supplier and Japan's largest SPE supplier, covering multiple product segments.
- Weaknesses
- The 1-month regression R² is only about 0.53, so predictive power is limited.
- Comparison
- The model implies China revenue growth of 14% QoQ, with China revenue mix rising to 32%, above the previous 27%.
- Risks
- Limited model explanatory power, yen moves and price competition, and global equipment-cycle volatility.
- KokusaiImport data are used to forecast a rebound in China revenue.
- Strengths
- Batch ALD adoption is increasing in advanced nodes and NAND.
- Weaknesses
- China revenue is highly volatile.
- Comparison
- The model implies China revenue growth of 101% QoQ, with China revenue mix rebounding to 51%.
- Risks
- NAND capex recovery falling short of expectations and month-to-month import volatility.
- ScreenImport data imply a pronounced weakening in China revenue.
- Strengths
- Panel-level packaging could provide an upside watchpoint.
- Weaknesses
- Cleaning intensity has not improved materially, and competition is intense.
- Comparison
- The model implies China revenue declining 73% QoQ, with China revenue mix falling to 12%, down from 46% previously.
- Risks
- Competition from TEL, Lam, and Chinese players ACMR and Naura.
- AdvantestTest-equipment-related import data are used to judge China revenue.
- Strengths
- Benefiting from higher HBM and Nvidia AI GPU testing intensity, with strong share in HBM testers and AI GPU testing.
- Weaknesses
- The model implies a 7% decline in China revenue QoQ.
- Comparison
- China revenue mix is expected to fall to about 12%, down from 15% previously.
- Risks
- Volatility in AI and HBM testing demand, and lower China revenue mix.
- NAURAChina's leading domestic WFE player, benefiting from domestic substitution.
- Strengths
- Its product portfolio covers PVD, CVD, dry etch, thermal processing, cleaning, and more, with a broad customer base.
- Weaknesses
- It still faces competition from overseas leaders in high-end equipment segments.
- Comparison
- The report lists an Outperform rating and a CNY 680.00 target price.
- Risks
- Progress in domestic substitution, technology validation, and customer capex cycles.
- AMECChina's domestic etch and deposition equipment company, benefiting from domestic substitution.
- Strengths
- Well recognized in dry etch and expanding into deposition areas such as ALD, LPCVD, and EPI.
- Weaknesses
- Product expansion still requires continued validation.
- Comparison
- The report lists an Outperform rating and a CNY 500.00 target price.
- Risks
- Technology iteration, overseas competition, and customer onboarding pace.
Key data
- April China WFE imports totalUS$2.7bnDown 12% MoM and 3% YoY, below last year's monthly average of US$3.2bn.
- China WFE imports YTD 2026US$10.0bnDown 13% YoY.
- April lithography importsUS$142mnDown 60% YoY, accounting for only about 5% of total April imports.
- Lithography imports YTD 2026US$1.85bnDown 27% YoY, the main drag on weak overall imports.
- April imports excluding lithographyUS$2.595bnUp 15% MoM and 5% YoY.
- April Dutch lithography importsEUR 87mnDown 87% MoM and 65% YoY, the lowest level since July 2022.
- ASML China systems sales estimateEUR 0.44bnRegression model estimates imply China sales fell 64% MoM and 71% YoY, with China making up about 7% of total systems sales.
- 2026 YTD import share of the U.S. + Malaysia + Singapore44%Higher than 35% in 2025 and 33% in 2024.
- YTD import size in Shanghai and BeijingUS$3.0bn / US$2.6bnRepresenting about 30% and 26% of YTD imports, respectively.
Impact & implications
In terms of investment implications, the April data create near-term pressure on ASML China revenue and also support the view that LRCX China revenue will decline sequentially; however, imports excluding lithography still grew, indicating that China semiconductor equipment demand has not weakened across the board. Domestic substitution and China wafer fab expansion continue to support share gains for local equipment makers such as NAURA, AMEC, and Piotech, while changes in the regional shipment mix suggest investors should watch the trend of foreign equipment companies delivering to China through production bases in Singapore, Malaysia, and elsewhere.
Risks
- Monthly import data are volatile, and a single month's data may not fully represent quarterly or annual demand.
- Weak lithography imports may stem from supply constraints, but could also reflect export controls and customer delivery timing.
- Customs equipment classifications are not fully consistent with industry-standard taxonomies, which may affect the interpretation of subcategories.
- If China WFE demand actually slows, it would weaken the report's view that non-lithography equipment remains resilient.
- Regression-model explanatory power for company China revenue varies, so the results for TEL, Screen, Advantest, and others should be used cautiously.
- Geopolitics, export controls, supply-chain shifts, and domestic substitution may alter historical correlations.
What to watch
- Whether China's lithography imports recover from the April low in subsequent months, especially DUV-related imports from the Netherlands.
- Whether WFE imports excluding lithography can continue to post both YoY and MoM growth.
- Changes in the shares of shipments to China from the United States, Malaysia, and Singapore, to judge whether overseas equipment supply-chain routes continue to shift.
- Whether ASML's FY26 China revenue contribution stays near the company's guidance of 20%, and whether improved DUV supply creates upside.
- Whether LRCX, KLAC, TEL, Kokusai, Screen, and Advantest China revenues in subsequent quarters are in line with the model direction.
- The pace of share gains for domestic equipment makers NAURA, AMEC, and Piotech in deposition, etch, cleaning, and advanced packaging equipment.