Summary of China Semiconductor Equipment Import Analysis Industry Overview - The report focuses on the semiconductor production equipment (SPE) industry in China, particularly analyzing import trends and demand dynamics in major cities like Shanghai and Beijing [1][4]. Key Highlights - **November 2025 SPE Imports**: Total SPE imports normalized to **US$2.1 billion**, reflecting a **10% YoY decrease** and a **29% MoM decline** from **US$2.98 billion** in October [1]. - **Year-to-Date (YTD) Performance**: Combined import demand for the first eleven months of 2025 reached **US$30.5 billion**, marking a **5% YoY increase** [1]. - **Regional Demand**: Shanghai and Beijing accounted for **67%** of total SPE imports in November, with Shanghai's imports at **US$902 million** (+179% YoY) and Beijing's at **US$525 million** (+41% YoY) [1]. Equipment Type Analysis - **Lithography Equipment**: - November litho imports totaled **US$707 million**, down **15% YoY** and **32% MoM**. However, litho accounted for **33%** of total imports, above the typical range of **20-25%** [2]. - Strong demand for litho suggests sustainable expansion activities in the long term [2]. - **Deposition Equipment**: Imports reached **US$414 million**, up **8% YoY**, driven by other deposition (+72% YoY) and CVD (+24% YoY) [2]. - **Etch Equipment**: Imports were **US$428 million**, down **32% YoY** [2]. Import Sources - The Netherlands and Japan were the top exporters to China, holding **29%** and **28%** market shares, respectively [2]. - Imports from the US accounted for only **4%** of total SPE imports [2]. Major Import Transactions - In November, Shanghai imported **nine litho tools** from the Netherlands for a total of **US$494 million** (average selling price of **US$55 million** per unit) [3]. - Accumulated litho imports from the Netherlands in Shanghai, Beijing, and Guangdong reached **US$3.2 billion**, with Shanghai showing a **71% YoY increase** [3]. Future Outlook - **WFE Spending Projections**: Expected growth of **10%** in 2026 and **1%** in 2027, following an **8%** growth in 2025, driven by advanced logic and memory capacity expansion projects [4]. - **Top Picks**: NAURA is highlighted as a key buy, with buy ratings also on AMEC and ACMR Shanghai [4]. Risks and Considerations - **Downside Risks**: Include potential macroeconomic downturns, geopolitical tensions, and slower-than-expected R&D progress [48]. - **Upside Risks**: Faster-than-expected demand recovery and aggressive capex plans from domestic fabs could enhance market conditions [48]. Conclusion - The analysis indicates a mixed but cautiously optimistic outlook for the semiconductor equipment sector in China, with significant regional demand and potential for growth in WFE spending, despite existing risks.