Semiconductor Equipment Sector Surges: AI Demand Drives Record Growth Through 2027

• Global Equipment Sales (2027): ¥1.11 Trillion RMB
• GPU Market Value (2029): ¥1.15 Trillion RMB
• Logic Segment Growth (2025): 37.1%
• Equipment Sales Surge (2025): 13.7% YoY

The semiconductor equipment market is firing on all cylinders right now.

As of late December 2025, China’s chip equipment stocks are absolutely crushing it.
On a single trading day, multiple companies hit their daily price limits—Tongfei (Tongfei Gufen 同飞股份), Wanrun (Wanrun Gufen 万润股份), Eastern China Entertainment (Dongcai Keji 东材科技), and Guofeng New Materials (Guofeng Xincai 国风新材) all peaked at once.

That kind of synchronized strength doesn’t happen by accident.
There’s real momentum behind the semiconductor equipment sector right now, and it’s worth understanding why.

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The AI Tailwind: GPU Demand Exploding

Let’s cut to the chase: artificial intelligence is the engine driving everything.

Here’s the math.

Research firm Yole Group forecasts that the global IDC (Internet Data Center) GPU market will expand dramatically:

• 2024: ¥612.3 billion RMB ($85.6 billion USD)
• 2029: ¥1.15 trillion RMB ($162.0 billion USD)
• Growth Rate: 13.61% compound annual growth (CAGR)

That’s not incremental growth.
That’s a near-doubling of GPU market value in five years.
And GPUs are the fundamental building blocks of AI infrastructure.

When demand for AI chips explodes, the equipment manufacturers that build those chips see massive tailwinds.

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The Equipment Market Hits Historical Highs

The upstream semiconductor equipment sector is following suit.

According to SEMI (Semiconductor Equipment and Materials International), total global semiconductor manufacturing equipment sales are on a tear:

• 2025: ¥950.9 billion RMB ($133.0 billion USD) — up 13.7% year-over-year
• 2026: ¥1.03 trillion RMB ($145.0 billion USD)
• 2027: ¥1.11 trillion RMB ($156.0 billion USD)

2025 is already a historical record.
And the growth doesn’t stop there.

The driving force?
AI infrastructure buildout.

We’re talking specifically about high-end logic circuits, memory production, and advanced packaging technologies.
Every major cloud provider and AI chip maker needs cutting-edge manufacturing capacity, and that capacity doesn’t exist yet.

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What Actually Gets Built: The Supply Chain Map

Here’s where things get interesting for investors.

Chip manufacturing is a multi-stage process, and different companies dominate different segments.
Understanding this breakdown helps you spot where the bottlenecks (and opportunities) actually are.

The Main Manufacturing Processes

Modern chip production involves several critical stages:

• Wafer processing and preparation
• Oxidation
• Photolithography
• Etching
• Thin-film deposition
• Interconnection
• Testing
• Packaging

Key Chinese Equipment Manufacturers by Process

China has built a meaningful domestic semiconductor equipment ecosystem.
Here are the major players by specialty:

Oxidation Equipment:

• NAURA Technology (Beifang Huachuang 北方华创)

Etching Equipment:

• AMEC (Zhongwei Gongsi 中微公司)

Thin-Film Deposition:

• Piotech (Tuojing Keji 拓荆科技)
• Leadmicro (Weidao Nanmi 微导纳米)
• ACM Research Shanghai (Shengmei Shanghai 盛美上海)

Testing & Inspection:

• Jingce Electronic (Jingce Dianzi 精测电子)
• Zhongke Fei-Ce (Zhongke Feice 中科飞测)

Packaging & Assembly:

• Huahai Qingke (Huahai Qingke 华海清科)
• Delphilaser (Delong Jiguang 德龙激光)
• Kingsemi (Xinyuanwei 芯源微)

These companies are the unsung heroes of the AI boom.
Most people know about Nvidia (Yingweida 英伟达) and TSMC (Taidianji 台积电), but these equipment makers are equally critical to scaling production.

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What’s Coming in 2026 and Beyond

Here’s where the story gets even more interesting.

Logic Semiconductors Leading the Charge

According to World Semiconductor Trade Statistics (WSTS), logic semiconductor revenue—which includes Nvidia GPUs and similar processors—is projected to grow by 37.1% in 2025.

That’s not just growth.
That’s the primary growth engine for the entire global semiconductor industry.

Everything else is secondary to logic chips right now.

The 2026 Inflection Point

Looking ahead, Huatai Securities (Huatai Zhengquan 华泰证券) highlights three major catalysts:

1. ASIC Expansion

Beyond just GPUs, we’re seeing growth in specialized chips like TPUs (Tensor Processing Units) and other application-specific integrated circuits.
These require different manufacturing approaches and will trigger new equipment cycles for front-end providers like ASML and Tokyo Electron.

2. Next-Generation Process Nodes

Nvidia’s upcoming Rubin series GPUs will use 3nm manufacturing processes.
Moving to smaller process nodes requires entirely new equipment—more sophisticated lithography tools, more advanced etching systems, everything.
This is a massive capex cycle waiting to happen.

3. Extended Testing Duration

As chips become more complex, testing takes longer.
This means demand for testing equipment from companies like Advantest and Teradyne should accelerate.

The Packaging Bottleneck Breaking

Here’s a critical constraint that’s about to ease up.

Right now, TSMC (Taidianji 台积电)’s advanced packaging capacity—specifically CoWoS (Chip-on-Wafer-on-Substrate)—is a genuine bottleneck limiting AI chip shipments.

By 2026, that changes.

Intel, ASE (Advanced Semiconductor Engineering), and Amkor are all expanding their advanced packaging capacity.
Once that capacity comes online, we’ll see massive demand for back-end equipment:

• Dual-bonding systems
• Grinding equipment
• Dicing tools
• Molding machines

This represents an entirely new growth vector for semiconductor equipment companies.

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Why This Matters Right Now

The semiconductor equipment sector is at an inflection point.

You’ve got three converging forces:

• Explosive AI demand requiring massive GPU production
• Capacity constraints forcing new fab builds and expansions
• Generational process node transitions (moving to 3nm and beyond)

This isn’t just a temporary spike.

The SEMI forecasts show sustained growth through at least 2027, with equipment demand still climbing.
That’s a multi-year tailwind for the entire supply chain.

For investors tracking Chinese tech, this is particularly relevant because domestic equipment manufacturers are finally getting real traction on cutting-edge manufacturing processes.
Companies that can compete at advanced nodes will capture enormous value.

The semiconductor equipment sector remains one of the most compelling AI infrastructure plays—and it’s happening largely beneath the surface while everyone focuses on chip designers.

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References

• Demand Remains Strong! Semiconductor Equipment Stocks Overview – East Money (Dongfang Caifu 东方财富)
• Global Semiconductor Equipment Market Data – SEMI
• The GPU Market is Booming – Yole Group
• World Semiconductor Trade Statistics Release – WSTS