The tightening of US export controls on advanced semiconductor technology was designed to stall China’s technological ascent. Instead, it appears to be accelerating the growth of China’s domestic semiconductor equipment industry. According to a new analysis by 24/7 Wall St., Chinese equipment vendors are quietly but steadily taking market share from established Western giants such as ASML, Applied Materials, and Lam Research, turning geopolitical pressure into a catalyst for rapid industrial maturation.
The Market Share Story
In 2025, a cohort of leading Chinese vendors, including NAURA, AMEC, ACM Research, Hwatsing, Piotech, and Kingsemi, collectively captured 6.5 percent of the $41.4 billion global wafer fabrication equipment (WFE) market. While this remains a single-digit share, the trajectory is striking: their combined share has grown from just 1.2 percent in 2021 to 5.6 percent in 2024, and now 6.5 percent in 2025.
The revenue growth of these domestic champions far outpaces their international competitors. The mean revenue growth for Chinese equipment companies from 2024 to 2025 was an impressive 30.5 percent, compared to just 9.3 percent for the top non-Chinese companies. This surge is driven by a massive, state-backed push for technological self-sufficiency, as Chinese foundries increasingly turn to local suppliers to mitigate the risk of sudden supply chain disruptions.
The shift in procurement is evident in the data. In 2021, 75 percent of the semiconductor manufacturing equipment sold in China was imported. By 2025, that figure had dropped to 65 percent. Total equipment sales in China grew from $17.7 billion in 2021 to $26.7 billion in 2025, meaning domestic suppliers are capturing a larger slice of a significantly expanding pie.
The Key Players
Leading the charge is NAURA Technology Group, which boasts the broadest portfolio among Chinese vendors, covering etch, physical vapor deposition (PVD), chemical vapor deposition (CVD), and thermal processing. NAURA, along with Advanced Micro-Fabrication Equipment Inc. (AMEC), a leader in plasma etch tools for logic and memory, both secured spots in the Top 10 global equipment companies by revenue in 2025.
Other specialized firms are making critical inroads at specific points in the manufacturing process. ACM Research is gaining traction in wafer cleaning and electrochemical plating, processes vital for advanced nodes. Piotech is advancing thin-film deposition (PECVD and ALD), while Hwatsing provides essential chemical-mechanical planarization (CMP) equipment for wafer planarization. Kingsemi is developing track systems for photolithography, a critical complement to the lithography scanners that China still largely imports.
The Limits of Progress
The urgency of this domestic substitution was underscored recently when the US ordered equipment makers to halt certain shipments to Hua Hong Semiconductor, China’s second-largest foundry. Such actions reinforce Beijing’s conviction that reliance on foreign technology is a critical vulnerability. While Chinese vendors are not yet fully competitive across all leading-edge segments, particularly in extreme ultraviolet (EUV) lithography, where ASML maintains an effective monopoly, they are establishing a formidable presence at mature and mid-critical nodes. As US sanctions continue to restrict access to the most advanced Western tools, China’s domestic equipment makers are capitalizing on a captive market, steadily building the capabilities that will eventually allow them to challenge at the frontier.
The Connection to China’s AI Ambitions
The semiconductor equipment story is inseparable from China’s AI ambitions. The ability to manufacture advanced chips domestically, and to do so at scale, is the foundational prerequisite for AI self-sufficiency. Huawei’s Ascend 910C and 950 chips, which are now being deployed by Tencent, Baidu, and other major cloud providers as substitutes for Nvidia’s restricted H100 and H200, are manufactured using equipment increasingly sourced from domestic suppliers. As Huawei’s AI chip revenue is projected to jump 60 percent in 2026, the demand for the equipment needed to manufacture those chips at higher yields and finer geometries will only intensify.
The trajectory of China’s equipment sector also has implications for the global semiconductor industry. Western equipment makers such as Applied Materials, Lam Research, KLA, and Tokyo Electron have historically relied on China as their largest single market, with China accounting for roughly 30 percent of their combined revenue in recent years. As Chinese foundries substitute domestic equipment for imported tools, the revenue base of these Western companies will face structural headwinds. The 30.5 percent growth rate of Chinese equipment vendors in 2025, sustained over several more years, would represent a fundamental reordering of the global semiconductor supply chain — one that US export controls, intended to prevent exactly this outcome, appear to be inadvertently accelerating.