China’s chip equipment rally faces earnings test as memory boom fuels bets on local tools
With first-half earnings season looming, the question for the semiconductor industry is whether results can justify stock rally
China’s semiconductor equipment industry is heading into the first-half earnings season under intense scrutiny, as a broad stock rally turns one of the tech sector’s least visible niches into a crowded investor trade.
The rally has swept across makers of etching, thin-film deposition, cleaning and testing machines, among others, reflecting bets that China’s next round of chip spending will benefit a wider group of domestic suppliers.
Other listed suppliers, including Kingsemi, Hangzhou Changchuan Technology, Accotest, Skyverse Technology and Wuhan Jingce Electronic Group, have also been swept up in the enthusiasm.
The question now on observers’ minds is whether earnings results can justify the sharp re-ratings. Investors are awaiting proof that memory-chip expansion, the shift to advanced packaging and Beijing’s self-reliance push are translating into hard orders, driving revenue growth and sustainable margins.
A group of 14 major Chinese chip equipment firms tracked by Soochow Securities recorded combined revenues of 90 billion yuan (US$13.1 billion) in 2025, up 35 per cent year on year. First-quarter revenue for 2026 rose 32 per cent to 21.78 billion yuan, while combined net profits surged 61 per cent in the same period.