Overview of the Semiconductor Industry
As the core of modern information technology, the semiconductor industry is a strategic, fundamental, and leading industry that supports economic and social development and ensures national security. In recent years, with the rapid rise of emerging application fields such as artificial intelligence, high-performance computing, 5G communications, and automotive electronics, the global semiconductor market size has shown a steady growth trend. In 2021, the global semiconductor market size increased from $555.9 billion to $795.6 billion by 2025, with an annual compound growth rate of 9.4%. Currently, cutting-edge industries represented by artificial intelligence continue to release demand for high-performance chips, driving the rapid iteration of semiconductor technology. It is estimated that by 2030, the global semiconductor market size will reach $1.4619 trillion, with a compound annual growth rate from 2026 to 2030 expected at 11.2%. Against this backdrop, the global semiconductor industry chain has formed a highly coordinated and clearly divided pattern, with advanced manufacturing processes and core key equipment becoming key areas for countries to build their core competitiveness.
China, as the world's largest semiconductor consumer market, has seen a significant acceleration in the process of semiconductor industry chain autonomy in recent years, driven by strong support from national industrial policies and robust downstream market demand. The market size has increased from $192.5 billion in 2021 to $262.5 billion in 2025, with an average annual compound growth rate of 8.1%. A complete industrial system covering chip design, wafer manufacturing, packaging testing, and upstream equipment and materials has now been formed; with continuous expansion of domestic wafer production lines and increasing process complexity, the industry's technical focus is gradually evolving from capacity building in the early stages to improving production yield and refined operation management. It is estimated that by 2030, the Chinese semiconductor market size will reach $519 billion, accounting for more than 35% of the global semiconductor market. This industry transformation and upgrading process not only provides a broad market space and strategic development opportunities for local semiconductor equipment and solution manufacturers but also comprehensively catalyzes the entire industry chain towards high-end manufacturing, becoming an important support for ensuring the security of the national electronic information industry chain supply chain.
Overview of the Semiconductor Equipment and Semiconductor Equipment Parts Industry
Semiconductor equipment parts are at the cornerstone of the semiconductor industry, and their technical level and process limits directly determine the precision and efficiency of midstream complete equipment and even downstream chip manufacturing. From the perspective of the industry chain transmission path, basic raw materials such as metals and non-metals are precision processed to form mechanical parts, gas/liquid/vacuum systems, mechatronics, optics, electrical parts, instruments, and other high-precision components. These core components are deeply coupled and matched through software and hardware, vertically integrated into upstream core complete equipment such as etching, cleaning, thin film deposition, and chemical mechanical polishing, and ultimately serve downstream integrated circuit manufacturers and wafer foundries. Benefiting from the continuous advancement of domestic wafer production line construction and the accelerated release of the demand for local substitution of existing machines, the market size of semiconductor complete equipment and core parts has shown a steady expansion trend. In terms of revenue, the Chinese semiconductor equipment market size reached a new level in 2025, with the overall market capacity exceeding 350 billion yuan; at the same time, the market size of semiconductor equipment parts (in terms of revenue) as the core support for equipment performance exceeded 190 billion yuan in 2025. The coordinated evolution of upstream and downstream of the industry chain demonstrates strong industry growth resilience and broad market space.
Analysis of the Semiconductor Equipment Industry Chain
Source: Frost & Sullivan
However, behind the continuous expansion of market size, the semiconductor equipment industry still faces deep-seated structural pain points. First is the non-equilibrium distribution of the core equipment supply chain, which is highlighted. Although the domestic rubber removal equipment market share has reached a high level of 80% to 90%, and the shares of etching equipment, cleaning equipment, and heat treatment equipment have also entered a steady climbing stage of 30% to 40%, in core manufacturing processes such as thin film deposition and chemical mechanical polishing, the overall share of domestic brands is only about 20% to 30%, especially in areas such as ion implantation and measurement/detection equipment, where the share is less than 5%, and in high-end lithography equipment where the share is less than 1%, overseas brands still dominate. Second, as wafer manufacturing evolves towards advanced process nodes, the microscopic structure size shrinks sharply, and processing tolerances are compressed to the nanometer level. Traditional experience or fixed-time control models are prone to overetching or insufficient processing due to perceptual lag, directly resulting in the scrapping of high-value wafers. To solve pain points such as insufficient etching equipment precision, the endpoint detection system, as a core process control subsystem of upstream manufacturing equipment, captures spectral or interference signals in real-time and high frequency within the reaction chamber and sends precise cutting commands, accurately determining the process completion node within milliseconds or even microseconds, thereby effectively avoiding material loss caused by overprocessing or insufficient processing. It is a key process control module that determines the yield and capacity ramp-up of production lines. With the improvement of the refinement level of downstream wafer manufacturing processes, the market size of endpoint detection systems for dry etching equipment in China has shown a steady growth trend, with domestic deliveries increasing from 4,584 sets in 2024 to 4,891 sets in 2025, and the corresponding market size also advancing from 250 million yuan in 2024 to 310 million yuan in 2025. In the future, benefiting from the continuous narrowing of advanced process window and the application extension of multi-process platforms, it is estimated that by 2030, the annual delivery volume of endpoint detection systems in China will exceed 12,000 sets, with an overall market value of 710 million yuan.
Development Trends and Driving Factors of the Semiconductor Equipment and Semiconductor Equipment Parts Industry
Digital Monitoring of Production Processes and Process Autonomous Optimization: As wafer processes evolve towards physical limits of 2nm and below, the process window is extremely narrow, and traditional physical machine adjustment modes are difficult to maintain high yields. Currently, semiconductor equipment is realizing digital modeling of the production process by integrating a large number of sensors and using machine learning algorithms to perform real-time precise compensation for key parameters such as etching and thin film deposition. This transformation from manual experience-driven to data model-driven can effectively reduce downtime and maintenance time and significantly improve output stability under complex process paths.
Advanced Packaging Drives Up Computing Power: As the physical limitations of single-chip miniaturization become increasingly apparent, improving system integration through advanced packaging technologies such as 3D stacking, hybrid bonding, and Chiplet has become an industry consensus. This directly drives demand for specialized packaging equipment such as high-precision alignment, deep-hole etching, and temporary bonding. The focus of the equipment market is extending from simple upstream processes to mid- and downstream cross-domain areas with high bandwidth and low power consumption characteristics.
Manufacturing Energy Efficiency Optimization and Resource Recycling: As advanced processes evolve towards 2nm and below, the unit energy consumption and resource consumption of wafer manufacturing have increased significantly, and energy efficiency bottlenecks have become a practical constraint limiting capacity expansion. Industry demand is driving equipment research and development towards low-power architectures, focusing on improving power conversion efficiency, optimizing the operating energy efficiency of vacuum systems, and achieving closed-loop recovery of chemicals. This trend prompts equipment manufacturers to introduce energy-saving and consumption-reducing solutions at the design stage to meet the sustainable production needs of wafer factories under the background of limited power supply and rising resource costs.
