Japanese Top Five Semiconductor Equipment Manufacturers See Combined Sales Decline in China for the First Time, Down 10%
In the fiscal year ending March 31, sales by Japan’s top five semiconductor equipment manufacturers in China collectively declined by 10%—the first-ever drop—primarily due to China’s ongoing efforts to promote domestic development in related industries. Chinese companies are not only capturing market share from Japanese firms but also eroding shares from their Western competitors.
Tokyo Electron, Advantest, Screen Holdings (Disco), Disco Corporation, and International Rectifier reported that their combined sales in China reached 1.47 trillion yen (approximately $9.11 billion), a 12% decrease compared to the previous fiscal year. Note that Screen Holdings’ data represents global sales from its semiconductor equipment business.
Tokyo Electron’s sales in China during the January–March quarter accounted for 27% of its total sales, down 7 percentage points from the same period last year—a sharp decline from 50% in the April–June 2024 quarter.
According to Nikkei Asia, the performance of front-end process equipment manufacturers used in silicon wafer circuit formation has declined notably. The combined sales of Tokyo Electron, Screen Holdings, and International Rectifier in China dropped nearly 20% year-on-year.
The semiconductor equipment sector has long been a stronghold of Japanese competitiveness. However, as Chinese companies rise in chip manufacturing following Taiwan and South Korea, they are now also gaining market share in manufacturing equipment.
Western giants such as ASML, Applied Materials, and KLA are also facing challenges in the Chinese market. ASML, the world’s largest equipment manufacturer, saw its sales share in China fall to 19% in Q1 2026—a drop of 8 percentage points year-on-year.
Data from the Semiconductor Equipment Association (SEMI) shows that China accounts for 37% of the global equipment market, with projected sales of $4.93 billion in 2025, roughly on par with the $4.96 billion recorded in 2024.
Market size has stabilized as Chinese manufacturers rushed to invest ahead of potential disruptions caused by U.S.-China trade tensions. Meanwhile, sales by Japanese, American, and European manufacturers have declined due to the growth of domestic Chinese producers.
Chinese chipmakers previously expanded their semiconductor fabrication facilities by purchasing equipment from Japan, the United States, and Europe. However, due to U.S. government restrictions targeting China, they can no longer access advanced foreign-made equipment.
The Chinese government is actively advancing the construction of an independent semiconductor supply chain. Beijing has mandated that domestic chipmakers prioritize procuring domestically produced equipment. According to MIR, a research firm based in Nagoya, China’s domestic equipment penetration rate—measured by value—in front-end processes reached 21% last year, up significantly from 10% in 2021. In back-end processes, including packaging, domestic content rose from 19% to 36%.
Beijing-based NAURA and Shanghai-based CRESCO Semiconductor are enhancing their technological capabilities under municipal government support. Huawei is a key driver behind China’s advancements in semiconductor technology. By dispatching engineers to equipment manufacturers such as NAURA and Shenzhen Xinkailai Technology Co., Huawei leads R&D initiatives aimed at independently developing and mass-producing AI semiconductors.
Tokyo Electron President Toshiki Kawai stated, “Our advantages in safety, environmental performance, and production capacity remain unchanged, and we will continue to lead industry development.” Screen Holdings also sees enormous opportunities in the Chinese market, as large-scale production of high-performance semiconductors has already begun in China.
Although sales of front-end equipment in China have stalled, Japanese manufacturers continue to see growth in back-end assembly equipment. Major testing equipment provider Advantest achieved approximately 20% sales growth in the previous fiscal year, while Disco’s sales rose nearly 10%.
On the side of chipmakers, Chinese enterprises are strengthening their presence in automotive control logic semiconductors and voltage regulation power semiconductors, and have started exporting products to Southeast Asia and other regions. Many of these companies are increasing capacity by adopting manufacturing equipment produced in China.
Source: rfi
Original article: toutiao.com/article/1868651277357060/
Disclaimer: This article reflects the personal views of the author