According to the latest statistics from CINNO Research, total investment in China's semiconductor industry reached 7,841 billion yuan in 2025, marking a 17.2% year-on-year increase. This growth demonstrates the sector's resilience amid a global industry cyclical adjustment and reflects China's strategic commitment to achieving supply chain autonomy. Investment across sub-sectors displayed distinct structural characteristics, with semiconductor equipment and materials showing significant expansion, emerging as key investment highlights, while other areas evolved according to their respective development stages.
The overall investment landscape in China's semiconductor industry in 2025 was characterized by steady total growth and deep structural optimization. Based on the latest CINNO Research data, wafer manufacturing remained the dominant segment with investment of 255.87 billion yuan, accounting for 32.6% of the total. However, due to saturation in mature process investments, this segment saw a slight 0.1% decrease compared to the previous year. Investment in semiconductor materials surged to 171.30 billion yuan, representing 21.9% of the total and a substantial 59.6% year-on-year increase, indicating continuous optimization of the investment structure with a notable rise in the proportion of high-end materials. The chip design sector attracted 197.93 billion yuan in investment, comprising 25.2% of the total and growing 9.2% year-on-year, showing steady development. Packaging and testing investment reached 77.40 billion yuan, accounting for 9.9% of the total but declining 7.0% compared to the prior year. Investment in semiconductor equipment soared to 81.62 billion yuan, a remarkable 100.2% year-on-year surge, making it the only segment to achieve doubled growth and highlighting its core role in the industry's pursuit of self-sufficiency.
Facing dual pressures from the global semiconductor market's cyclical adjustments and international technology controls, China's semiconductor industry has shifted its focus from pure scale expansion to strategic optimization of its investment structure. Capital is being concentrated on critical areas such as equipment localization and material innovation, building momentum for breakthroughs and laying a solid foundation for industrial upgrading.
The sharp increase in semiconductor equipment investment, defying broader trends, represents a breakthrough in indigenous innovation driven by external technology restrictions. U.S. technology controls, while limiting China's access to advanced equipment, have activated domestic innovation momentum, propelling the industry onto a development path driven by synergistic policy, market, and technological forces. At the policy level, the National Integrated Circuit Industry Investment Fund and local specialized funds have provided precise financial impetus for core technology R&D. On the demand side, expansion waves at domestic wafer fabs, coupled with localization substitution policies, have created stable order streams for local equipment manufacturers, fostering a virtuous cycle of R&D and application. Technologically, companies like Naura Technology Group Co.,Ltd. have reached international advanced levels in key equipment areas such as etching and thin-film deposition, accelerating the pace of domestic substitution. This "restriction-induced breakthrough" paradigm is reshaping the global semiconductor equipment landscape, with China gradually transforming from a passive recipient into a significant innovative participant. Although core equipment like lithography machines still faces technological bottlenecks, sustained R&D investment and collaborative innovation across the supply chain are building momentum for eventual breakthroughs, with rising localization levels becoming a crucial pillar for industrial autonomy.
Investment was highly concentrated geographically, with the top five regions attracting nearly 60% of the total capital. Shanghai led with investment of 72.82 billion yuan, accounting for 13.8% of the national total and establishing itself as a core investment hub. Jiangsu province followed closely with 70.11 billion yuan, representing a 13.3% share. Anhui province (11.5%), Guangdong province (11.1%), and Zhejiang province (7.8%) ranked third to fifth respectively. Hubei province also emerged as a significant cluster, propelled by breakthroughs in memory chip manufacturing.
This concentrated investment pattern stems from three core factors: the deep industrial foundation in the Yangtze River Delta region, where Jiangsu has formed a complete industrial chain in wafer manufacturing and packaging/testing with significant supporting advantages; policy and resource倾斜, with core cities like Shanghai creating institutional advantages through specialized funds and talent policies that attract capital and enterprises; and enhanced regional synergy, as the Yangtze Delta semiconductor ecosystem centered on Shanghai demonstrates increasing scale effects and resource allocation efficiency.
The 59.6% high growth in semiconductor materials investment made it a major growth driver for the industry. This investment displayed clear technological upgrading characteristics, facilitating a strategic transition from traditional silicon-based materials towards high-end specialty materials. Third-generation semiconductor materials became a focal point, with investment of 28.65 billion yuan ranking first among material sub-segments and accounting for 16.7% of total materials investment. These wide-bandgap materials, with their superior performance, show significant advantages in high-end applications like new energy vehicle power control, 5G base station RF, and smart grids, making them a key breakthrough direction. The global market share of domestic SiC substrates continues to rise, expanding the industry's influence. Meanwhile, the silicon wafer segment received 26.44 billion yuan in investment, ranking second with a 15.4% share. Electronic special gases attracted 15.69 billion yuan, ranking third with a 9.3% share. The growth in high-purity electronic special gas investment reflects continuous breakthroughs by domestic companies in critical segments of the semiconductor materials supply chain, gradually breaking foreign technological monopolies and advancing supply chain autonomy.
From a global perspective, the semiconductor industry in 2025 is undergoing cyclical adjustments and structural transformations. Emerging technologies like AI, 5G, and the IoT are unleashing long-term growth potential, but significant investment divergence exists due to global economic slowdown and geopolitical tensions. As the world's largest semiconductor consumer market, China has forged a distinctive development path. While U.S. export controls have constrained access to advanced technology in the short term, they have unexpectedly activated innovation momentum in domestic equipment and materials sectors, accelerating local breakthroughs in key technological bottlenecks like sub-28nm process equipment and third-generation semiconductor materials. This "pressure-response" development model has fostered a new paradigm for China's semiconductor industry. Core regions like the Yangtze River Delta achieve efficient resource allocation through industrial chain synergy, with investment concentration continuously increasing. Policy instruments, exemplified by the National Fund, precisely guide capital towards weak links in the supply chain. The industry's transformation in 2025 yielded significant results, with steady improvements in semiconductor equipment localization levels and a markedly increased global market share for SiC substrates, laying a solid foundation for future development.
Looking ahead, China's semiconductor industry is entering a new phase of "intensive cultivation." Its future trajectory will depend on a dynamic balance among three key variables: substantive breakthroughs in indigenous innovation capability, precise implementation of industrial policy tools, and the flexible space for international technological cooperation. Against a backdrop of deglobalization and rising techno-nationalism, China's semiconductor industry is carving a distinctive path rooted in self-sufficiency and supplemented by open cooperation. This development model may ultimately redefine the global semiconductor industry's value chain structure.
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