Industry group Semi said in a report that although China will become the world's largest buyer of chip manufacturing equipment this year.
Beijing will spend about $38 billion on chip tools, the highest in the world, but a 24% drop from the $50 billion spent last year.
China's estimated spending will account for one-third of the global investment in global chip tools, i.e. Half report said.
AI experts say
Since last year, analysts have been warning China about slowing consumption on chip devices. Last month, Canadian semiconductor research firm TechInsights explain The slowdown will be caused by “export control and overcapacity.”
China was the global growth driver for the global wafer manufacturing equipment industry in 2023 and 2024, when the vast market declined due to demand for consumer electronics.
Many of China’s purchases are driven by inventory as the U.S. imposes a series of sanctions to enable Stymie Beijing to acquire and produce chips that could help promote artificial intelligence for military applications or otherwise threaten U.S. national security.
The slowdown in China's overall equipment spending is also a time when actively working to build a self-sufficiency chip supply chain and has multibillion-dollar state support.
Chinese chip companies Despite multiple progress in Washington's base, China's largest chipmaker Smic and the United States approved Huawei to produce premium chips last year through more expensive and laborious efforts.
Meanwhile, Beijing's biggest weakness remains lithography systems, as well as testing and assembly tools.
But earlier this month, market research firm Trendforce Report That Smic and Huawei also developed the country's first local extreme ultraviolet (EUV) lithography machine ever.
EUV machines are considered to be the most advanced chip manufacturing tool at present, with ASML in Europe being its main supplier. However, ASML has never sold its EUV machines in China due to export controls.
SMIC and Huawei's EUV machines are scheduled to be tested in the third quarter of 2025. The goal of these companies is to start mass production next year.
Other leading Chinese equipment manufacturers, including Naura Technology and AMEC, are also expanding their footprint worldwide. In terms of sales, Naura is now the seventh largest equipment manufacturer in the world.
Top buyers in other Asian countries
The semi-report also pointed out that South Korea is expected to be the second highest stock among chip tools by 2026.
South Korean investment is expected to grow 29% in 2025 to $21.5 billion and 26% in 2026 to $27 billion.
The key driver of South Korea's spending on chip tools is the growing penetration of artificial intelligence, which has led to a surge in memory adoption. Semi noted that the country's largest Chipmakers SK Hynix and Samsung Electronics plan to invest more equipment in expansion and technology upgrades.
Taiwan's spending is expected to be NVIDIA and others' AI chips, with an estimated $21 billion.
Other regions, the Americas and Japan will each spend $14 billion in 2025, while Europe will spend $9 billion, Semi said.
- Reuters, other editors and inputs with Vishakha Saxena
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