CITIC Construction Investment: Global semiconductor equipment has entered the “sharp rise in volume and price” channel, and the process of domestic equipment going overseas is accelerating

The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that the global semiconductor equipment boom continues to improve, that overseas equipment and components have experienced a “sharp rise in volume and price”, overseas deliveries have been drastically extended, domestic equipment and components have experienced training during the “14th Five-Year Plan” period, and their capabilities have greatly improved, and they have sufficient potential to go overseas. On the other hand, in addition to external sanctions, global shortages have made it more difficult for domestic and downstream customers to obtain overseas equipment and parts. The bank is optimistic that the rate of domestic replacement in the domestic market will be greatly accelerated.

CITIC Construction Investment's main views are as follows:

Benefiting from the expansion of downstream capital expenditure, the semiconductor equipment industry continues to prosper

Demand for AI computing power continues to grow, and global semiconductor capital expenditure has entered a new upward cycle. TSMC maintains high-intensity investment in advanced manufacturing processes. Micron, Samsung, SK Hynix, and Kioxia have successively raised or accelerated medium- to long-term production expansion plans. The investment content was further extended from importing existing plant equipment to building new fabs, clean rooms and supporting infrastructure, and most long-term plans continued beyond 2030, reflecting the strong sustainability and flexibility of this round of production expansion. Affected by the long construction cycle of the plant, the clean room gradually became an important physical constraint limiting the release of overseas production capacity, and also formed a demand reserve for subsequent equipment procurement and installation.

The performance of overseas equipment leaders further validates the prosperity of the industry. In 2025, the total revenue and net profit of the eight major equipment companies increased by 12.70% and 28.66%, respectively; the total revenue and net profit growth rates of 2026Q1 were further increased to 16.42% and 39.45%, and profit growth continued to be faster than revenue growth. Looking at the downstream structure, logic and foundry have maintained a high boom, and DRAM and HBM-related investments are more flexible than NAND; judging from the regional structure, mainland China's share of revenue has declined, but it is still an important global equipment market. Demand in regions such as Taiwan, South Korea, and the United States is rising at the same time, and the industry is gradually shifting to multi-regional co-driving. The equipment boom is also spreading rapidly to upstream. Overseas parts companies generally lead revenue in order growth. Ongoing orders continue to increase, and the ability to deliver some core components has become an important constraint on the expansion of equipment production.

Volume and price have risen sharply: gross margin resonates upward, and bargaining power from equipment to parts has increased

The current upturn in the semiconductor equipment boom was not only reflected in an increase in shipments, but also a simultaneous improvement in profitability. The gross margin of most overseas equipment leaders increased year-on-year in 2026Q1, mainly benefiting from the increase in the share of AI-related high-value equipment, optimization of product structure, recovery in production capacity utilization, and service business growth. As fabs speed up the construction of advanced manufacturing processes and storage capacity, customers pay more attention to timely delivery of equipment, process performance and capacity guarantee, and the bargaining power of differentiated products and scarce equipment gradually increases, driving equipment companies' profit growth rate significantly faster than revenue growth.

The improvement in profits in the parts sector comes from the combined effects of expanding demand, supply constraints, and product upgrades. Advanced logic, HBM, and advanced packaging are simultaneously increasing the quantity and performance requirements of core components such as vacuum valves, RF power supplies, fluid delivery systems, precision ceramics, and high-purity materials, while precision components have a long expansion cycle, high customer certification barriers, and short-term supply releases are relatively limited. As orders increase, delivery times are extended, and customers lock in production capacity ahead of schedule, the pricing power in the industrial chain is expected to shift to suppliers with technical and delivery advantages. Combined with the volume of high-value-added products, scale effects, and improvements in manufacturing efficiency, the equipment and parts industry chain is expected to gradually form a volume-price rise logic of “demand growth - tightening supply and demand - price increase - profit expansion”.

Long optimistic about semiconductor equipment and parts companies going overseas

The expansion of global fab production and insufficient supply of key components have created a new window for domestic equipment and component companies to go overseas. This round of overseas operations is not simply exporting surplus domestic production capacity, but domestic suppliers are using product capabilities, delivery efficiency, and cost advantages to fill the overseas equipment and parts supply gap. Domestic companies have formed a certain level of competitiveness in etching, film deposition, cleaning, measurement, testing and advanced packaging equipment, as well as vacuum, radio frequency power supplies, fluid systems, precision ceramics, and high-purity materials; some companies have previously entered the supply chain for overseas customers and initially have a foundation for overseas business expansion and local delivery by setting up sales and service agencies, acquiring overseas companies or building territorial production capacity.

There is a clear difference in the shipping schedule of equipment and parts. In 2025, the total overseas revenue of domestic semiconductor equipment companies was 3,615 billion yuan, accounting for 4.06% of overseas revenue, an increase of 7.87% over the previous year. However, revenue is still concentrated on a few pioneering enterprises, and the industry as a whole is in the customer verification and initial introduction stage. The total overseas revenue of the sample parts companies during the same period was 3.609 billion yuan, accounting for 17.54%, an increase of 12.20% over the previous year. Most companies achieved positive overseas revenue growth, reflecting the earlier integration of parts companies into the global supply chain and a more solid customer base. It is expected that the domestic industrial chain will gradually advance along the “product export - service localization - production capacity localization”. It is recommended to focus on tracking indicators such as overseas customer verification, repeated orders, installed capacity, service networks, and territorial capacity utilization.

Risk Alerts

The risk of not being able to keep up with process evolution and semiconductor equipment updates and iterations, the risk of losing technical personnel and leaking core technology, the risk of developing new products and new processes, and the risk of overseas sanctions escalation.