On August 5, 2026, the Semiconductor Industry Association (SEMI) released its latest "Global Semiconductor Equipment Market Semiannual Report." The report shows that global semiconductor equipment sales reached a record $123 billion in the first half of 2026, a year-on-year increase of 12%. Among them, the Chinese market continued to lead the world with $46.8 billion in procurement, accounting for 38%, maintaining its position as the world's largest semiconductor equipment market for four consecutive years. This data has sparked heated discussion in the hard technology investment circle—when the global semiconductor industry is still in a cyclical bottom, China is bucking the trend to掀起 an equipment procurement boom. What investment logic is hidden behind this?
1. Data Interpretation: China's "Counter-Cyclical" Expansion in Semiconductor Equipment Market
The most noteworthy point in the SEMI report is that China's strong demand has not been dragged down by the global semiconductor downturn cycle. From January to June, China's equipment procurement increased by 21% year-on-year, far exceeding the global average growth rate. By category, the import growth of etching equipment, thin film deposition equipment, and lithography machines (including immersion DUV) was most significant, reaching 28%, 24%, and 17% respectively.
From the application perspective, memory chip expansion is the core engine driving equipment procurement. As domestic storage giants like Yangtze Memory and CXMT accelerate their pursuit in 3D NAND and DRAM fields, large-scale production line construction has entered a concentrated implementation phase. In particular, CXMT's 17nm DRAM mass production line and Yangtze Memory's 232-layer 3D NAND capacity ramp-up have directly driven intensive procurement of front-end equipment. Additionally, capacity expansion of mature processes by foundries like SMIC and Huahong has also contributed significant equipment orders.
1.1 Memory Chip Expansion: From "Seeking Capacity" to "Seeking Technology"
In the past few years, China's storage industry has experienced leapfrog development from scratch to presence. 2026 is a critical node for China's memory chip technology breakthrough: CXMT's 17nm DDR5 product yield has improved to over 90%, and Yangtze Memory's 232-layer TLC NAND has successfully entered the supply chain of international first-tier SSD brands. Behind these breakthroughs lies the gradual validation and introduction of domestic semiconductor equipment—Northern China Electronics' etching machines, AMEC's MOCVD equipment, TEL's thin film deposition equipment have all achieved large-scale application in leading production lines.
The technology upgrade of memory chips also puts higher demands on equipment precision. Taking 3D NAND as an example, when the number of layers evolves from 128 to 232, the difficulty of high aspect ratio etching technology increases dramatically, which directly drives the dual increase in demand for etching equipment in terms of quantity and quality. The SEMI report points out that China's etching equipment procurement amount exceeded $10 billion for the first time in the first half of 2026, accounting for 41% of the global etching equipment market.
2. Hard Technology Investment Logic: Why Focusing on Semiconductor Equipment is a "Certain" Choice?
Semiconductor equipment is regarded as the "mother machine" of the integrated circuit industry, and its importance needs no elaboration. From an investment perspective, the semiconductor equipment track has three core advantages, making it the cornerstone of hard technology investment.
2.1 Policy Drive: Rigid Demand for Self-Reliance
Against the background of normalized geopolitical competition, semiconductor equipment has become a key bottleneck for technological self-reliance. In the first half of 2026, China introduced multiple policy measures to support the semiconductor industry, including the establishment of the National Integrated Circuit Industry Investment Fund Phase III (registered capital of 344 billion yuan), with equipment, materials, and EDA clearly identified as key investment directions. Policy dividends coupled with hard domesticization rate improvement indicators provide equipment companies with growth certainty of over ten years.
2.2 Cycle and Growth Resonance: Memory Expansion Brings Continuous Orders
The semiconductor equipment industry has typical "cyclical growth" characteristics. Although the global semiconductor market has cyclical fluctuations, equipment investment growth usually exceeds the industry average—because every technology iteration and production line upgrade means higher equipment capital expenditure. This round of intensive memory chip expansion, coupled with the explosive demand for high bandwidth memory (HBM) from AI servers, makes equipment order visibility extend to 2027. Taking HBM as an example, the equipment investment corresponding to 10,000 wafer monthly capacity is about 2.5 times that of conventional DRAM, which will bring significant incremental space for equipment suppliers.
2.3 Domestic Substitution: The Qualitative Change from "Usable" to "Good to Use"
In the past, domestic equipment was often criticized for "backward performance" and "instability," but after nearly five years of rapid iteration, the process coverage of mainstream domestic equipment has increased from less than 60% to over 85%. In etching, cleaning, coating, and developing processes, domestic equipment has achieved full 28nm process coverage and partially entered 14nm production line validation. More importantly, during the customer validation cycle, equipment companies have accumulated massive process data, forming a "application-feedback-iteration" virtuous cycle. This transformation from "usable" to "good to use" means that domestic equipment is moving from the edge to the core, and its valuation logic should also switch from "theme speculation" to "performance realization."
3. Deep Industry Chain Linkage: The "Iron Triangle" of Equipment, Materials, and Memory
The high prosperity of the semiconductor equipment market is not an isolated phenomenon. It forms deep linkages with memory chip price trends and material supply chain changes. According to SEMI data, storage-related spending accounted for 45% of global fab equipment expenditure in the first half of 2026, a historic high. And the strong demand for storage equipment has directly driven the domesticization process of upstream key components and materials.
For example, high-purity precursor materials used in 3D NAND manufacturing were long monopolized by overseas giants like Merck and Linde. With the mass production of domestic storage production lines, domestic material companies such as Artech Technology and Nanhua Optoelectronics have迎来 an accelerated substitution window. Similarly, core consumables like CMP polishing pads, quartz parts, and electrostatic chucks are also achieving batch supply under the drive of storage customers.
This "equipment-materials-memory" synergy effect constitutes the underlying support for the long bull market in hard technology. When investing in hard technology, one should not focus on a single segment but grasp the resonance opportunities across the industry chain.
4. Market Outlook: Three Main Lines for Hard Technology Investment in the Second Half of 2026
Based on the SEMI report and recent industry dynamics, we believe that hard technology investment in the second half of the year should focus on the following three main lines:
- Main Line 1: Rapid improvement in semiconductor equipment domesticization rate. Focus on leading enterprises in core segments such as etching, thin film deposition, cleaning, and ion implantation, with order growth expected to maintain over 30% annual growth.
- Main Line 2: Advanced packaging and HBM industry chain for memory chips. Memory expansion not only drives front-end equipment but also triggers an explosion of back-end advanced packaging (such as TSV, bonding) equipment. It is recommended to focus on storage manufacturers and material suppliers with HBM production capabilities.
- Main Line 3: Shortboard opportunities for semiconductor components and materials. After equipment domesticization reaches a certain level, core components (such as RF power supplies, gas mass flow controllers) and materials will become the next "choke points," with investment cost-effectiveness becoming prominent.
5. Risks and Challenges: Beware of the "High Input, Low Return" Trap
Of course, hard technology investment is not risk-free. The semiconductor equipment industry requires large investment, long payback periods, and fast technological iteration, and can be easily disrupted by next-generation technologies if not careful. Although Chinese equipment companies have achieved breakthroughs in the low-end market, there is still a significant gap with international giants in high-end lithography, EUV, metrology, and inspection. Additionally, geopolitical risks may further escalate, leading to interruptions in the supply of some key components, affecting industrial chain stability.
Therefore, heavy investment in hard technology does not mean blindly chasing gains, but should follow a "industry trend + performance verification" steady strategy. In terms of valuation, equipment companies should be given reasonable premiums for technological innovation and domestic substitution, but also beware of bubble risks from concept speculation.
Conclusion: Data is the Best Footnote
The "China's share of 38%" in the SEMI report is not a cold number, but a vivid footnote to the logic of hard technology investment. It tells us that in the new pattern of global technology competition, basic industries represented by semiconductor equipment are becoming the decisive factor in the game between major powers. For investors, heavy investment in hard technology is heavy investment in China's future of technological self-reliance and strength. This is a long and steep slope that requires patience, and even more foresight.
