Chinese semiconductor equipment launches a counterattack, Japanese giants' sales to China halved, and this time the West stays silent!

On June 24, Nikkei News published a report revealing a set of figures: in the fiscal year 2025, the combined sales of five major Japanese semiconductor equipment companies—Tokyo Electron, Advantest, SCREEN Holdings, DISCO, and KOKUSAI ELECTRIC—to China amounted to 1.47 trillion yen, a 12% drop from 1.66 trillion yen in the previous fiscal year. This marks the first time in history that these five top Japanese equipment suppliers failed to outperform their performance from the prior year.

The report also noted that Western giants are faring no better. ASML's sales share in China dropped from 27% last year to just 19% in the first quarter of this year—a decline of 8 percentage points. Sales for American firms like Applied Materials and KLA have largely stalled in China as well.

Data from the Semiconductor Equipment Association (SEMI) shows that China’s semiconductor equipment market size reached $49.3 billion in 2025, nearly unchanged from $49.6 billion in 2024. China alone accounts for 37% of the global market share.

The world’s largest buyer remains the same buyer. Yet the share of goods sold to this buyer that Japanese and Western companies receive is steadily declining. Breaking it down, 1.47 trillion yen may seem substantial, but the real pain point lies in the nearly 20% year-on-year drop in front-end equipment sales.

Tokyo Electron best illustrates the issue. In the first quarter of this year, its sales to China accounted for 27%, down 7 percentage points from the same period last year. Just over a year ago, in Q2 2024, this figure was still 50%. In less than two years, the share has been cut in half.

Here’s a crucial detail: the overall market size hasn’t changed. SEMI’s data clearly shows $49.3 billion versus $49.6 billion—essentially flat. The money remains the same. It’s simply no longer flowing into the pockets of Japanese and Western companies.

Nikkei News pointed to the cause: Chinese domestic enterprises have risen. According to research firm MIR, China’s domestic production rate for front-end semiconductor equipment reached 21% in 2025, up from 10% in 2021—a doubling in just four years. Back-end equipment saw even stronger growth, rising from 19% to 36%, nearly doubling.

Original article: toutiao.com/article/1869021140310016/

Disclaimer: The views expressed in this article are solely those of the author.