China's IC Imports and Exports Surge in May, Semiconductor Demand Remains Strong

Overview

This report analyzes import-export, production, and revenue data for the Greater China semiconductor industry from April to May 2026, highlighting continued strong semiconductor demand in the Chinese market. Although import volume slightly declined in May, the sharp increase in import value suggests a significant rise in average selling price (ASP). The report believes that driven by trends in generative AI and advanced driver-assistance systems (ADAS/AD), coupled with expanding market shares of domestic suppliers, China's semiconductor industry is expected to see sustained growth in capital expenditure, thus maintaining a buy rating on leading companies.

Core views

Both volume and price on the demand side have risen sharply, with exports performing particularly well. In May 2026, China's integrated circuit (IC) imports reached $56.6 billion, up 68.0% year-on-year. Although import volume fell slightly by 1.0% year-on-year, this meant that the average selling price (ASP) rose significantly by 69.7%. Even more remarkable was the export data: IC exports surged 110.9% year-on-year to $35.5 billion in May. From the beginning of the year to date, total exports reached $139.1 billion, up 89.8% year-on-year, demonstrating enhanced competitiveness of Chinese semiconductor products in the global market. Production remains steadily growing, with inventory at healthy levels. In April, China's IC production reached 48.1 billion units, up 22.1% year-on-year, accelerating further from March's 20.6%. Meanwhile, the electronics manufacturing industry's inventory days stood at 61 days in April, roughly matching the average level of previous years (57–64 days), indicating that the industry has not experienced severe inventory buildup and supply-demand balance remains relatively stable. All links in the industrial chain are generally recovering, with strong willingness for capital expenditure. Taiwan's major semiconductor listed companies saw total revenue rise 26.3% year-on-year in May, with foundry, IC design, and packaging & testing segments all posting positive month-on-month growth. On the Chinese mainland, semiconductor equipment import data showed structural differentiation: although the quantity and value of lithography machine imports declined year-on-year, semiconductor testing equipment imports surged 48.4% year-on-year in April. Moreover, recently, several manufacturers including SMIC and HuaHong Semiconductor have continuously launched equipment bidding processes, confirming the upward trend in industry capital expenditure.

Analysis framework

The report adopts a high-frequency data tracking approach, combining customs import-export data, National Bureau of Statistics production data, and enterprise bidding information to cross-validate industry sentiment from four dimensions: volume, price, inventory, and capital expenditure. First, by analyzing the difference in import and export value growth rates, it infers changes in average selling price (ASP) to determine whether product structure is shifting toward higher-end segments. Second, comparing production growth rates with inventory days helps assess the tight balance between supply and demand. Finally, by examining equipment import data and manufacturer bidding dynamics, it forecasts future capacity expansion pace. This combination of top-down (macro data) and bottom-up (micro bidding) approaches enables more accurate capture of industry turning points.

Methodology notes

• Industry/Industrial Analysis FrameworkVolume-price decomposition

  Volume-Price Decomposition Analysis

  By breaking down total value growth into volume growth and price (ASP) growth, it determines whether industry growth stems from increased demand volume or rising product value. In this report, import volume fell but value surged, indicating a higher proportion of high-priced chips or rising unit prices.

• Industry/Industrial Analysis FrameworkSupply-demand framework

  Inventory Cycle and Supply-Demand Balance

  Monitoring inventory days (DOI) helps determine whether the industry is in a destocking, restocking, or balanced phase. The report notes that current inventory days at 61 are at historical averages, suggesting demand can absorb supply and the industry is operating healthily.

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

  Industrial Chain Transmission Analysis

  Observing the linkage among upstream equipment imports, midstream manufacturing output, and downstream terminal exports. For example, a large increase in testing equipment imports may signal a recovery in backend packaging and testing demand, which in turn boosts capacity utilization in the manufacturing segment.

Asset mapping & comparison

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

• SMIC (0981.HK)

  Beneficiary stock, wafer foundry leader, Q1 2026 gross margin exceeded expectations

  Strengths

  Advanced process capability, expanding market share

• HuaHong Semiconductor (1347.HK/688347.SS)

  Beneficiary stock, specialty process foundry, recent equipment bidding

  Strengths

  Expansion of 8-inch and 12-inch production lines

• Northland Technology (Naura)

  Beneficiary stock, semiconductor equipment leader, benefiting from rising capital expenditure

  Strengths

  Platform-based equipment supplier, covering multiple process segments

• Zhongwei (AMEC)

  Beneficiary stock, etching equipment leader

  Strengths

  Technological leadership, mainstay of domestic substitution

• Shengmei Shanghai (ACMR)

  Beneficiary stock, cleaning and equipment supplier

• Cambricon

  Beneficiary stock, AI chip design

  Strengths

  Demand for generative AI computing power

• Sitwe (SICC)

  Beneficiary stock, CMOS image sensor

• Jingsheng Machinery (Kematek)

  Beneficiary stock, crystal growth equipment

• Horizon Robotics

  Beneficiary stock, smart driving chip

  Strengths

  Beneficiary of ADAS/AD trends

• Biren

  Beneficiary stock, GPU/AI chip

• MetaX

  Beneficiary stock, GPU chip

Key data

• May China IC Import Value YoY Growth Rate+68.0%April was +54.7%, accelerating growth
• May China IC Export Value YoY Growth Rate+110.9%Cumulative exports from the beginning of the year grew 89.8%
• May China IC Import ASP YoY Growth Rate+69.7%Implied calculation, reflecting product structure upgrade or price hike
• April China IC Production YoY Growth Rate+22.1%March was +20.6%, continuing to accelerate
• April China Electronics Industry Inventory Days61 daysWithin historical normal range (57–64 days)
• May Taiwan Semiconductor Revenue YoY Growth Rate+26.3%April was +15.2%, rebounding significantly

Impact & implications

The report believes that strong data supports the recovery logic of China's semiconductor industry, especially the incremental demand brought by generative AI and smart driving is being realized. For investors, they should pay close attention to companies with strong company-specific drivers (such as new product mass production, product portfolio upgrades, and market share gains). The upward trend in capital expenditure will directly benefit semiconductor equipment manufacturers (such as Northland Technology and Zhongwei) as well as wafer foundries with advanced process capabilities (such as SMIC).

What to watch

• Implementation of future capital expenditure plans by Chinese semiconductor manufacturers
• Continued impact of generative AI and smart driving on semiconductor demand
• Progress of domestic suppliers' market share expansion