Last week, we analyzed the semiconductor equipment sector, noting how some players saw revenue surge 95% while others saw profits multiply 13-fold, yet struggled to collect cash. Today, the focus narrows to Advanced Micro-Fabrication Equipment Inc. China (AMEC) (688012.SH), a company founded in 2004 that initially set up operations in Zhangjiang, Shanghai. It stands as one of the first batch of semiconductor firms listed on the STAR Market and holds the title of domestic leader in etching equipment. Last night, the company announced that its three major shareholders, including Xunxin (Shanghai) Investment, had completed their stake reduction, selling a cumulative 17.62 million shares at prices ranging from 313.5 to 429.31 yuan per share, raking in a total of 6.228 billion yuan.
AMEC's core business is built on plasma etching equipment, with both high-energy CCP and low-energy ICP series covering processes from 65nm down to 3nm and beyond. This forms its foundational strength. In recent years, through a mix of self-development and acquisitions, including taking control of Zhongzhong in the first half of 2026 to add CMP capabilities, the company has expanded its portfolio to 54 advanced equipment types: 26 for etching, 24 for thin films, plus CMP and metrology/inspection tools. By the end of June 2026, over 8,800 reaction chambers were in mass production across more than 220 production lines.
Since its IPO in 2019, AMEC has delivered exponential growth that met market expectations. Revenue climbed from 1.9 billion yuan to around 12 billion yuan, with this year's full-year forecast hitting at least 15 billion yuan. Net profit surged from 188 million yuan to 2.1 billion yuan, and a full-year profit above 3 billion yuan this year seems all but certain. This growth stems from several factors: continuous refinement of etching tools that expand domestic market share; diversification beyond etching into thin films, polishing, and inspection equipment, gradually building a platform model; and M&A that filled the CMP gap, achieving full coverage from dry to wet processes. Investing in AMEC is essentially betting on the timely realization of a domestic semiconductor equipment platform.
However, competition has intensified dramatically. When AMEC listed, fewer than five companies in the semiconductor equipment space traded on the STAR Market or the broader A-share market. Now, players like Shengmei, Huafeng, Tuojing, Changchuan, Huahai, Weidao, Yitang, Jinhai, Zhongke, Jingsheng, and Jingyi cover virtually every equipment category that domestic technology can currently produce. If we look only at etching and thin films, AMEC's rivals extend beyond listed companies to private firms and international players.
Where to Begin
AMEC's stated goal is to cover more than 60% of high-end semiconductor equipment categories within five years. Along this path, the company faces not only industry-wide challenges but also deeper contradictions inherent in platform transformation. The ideal logic of a platform approach is to leverage existing customer trust in etching to drive new product sales, but reality presents multiple hurdles. Wafer fabs often make procurement decisions independently across different process departments, so etching's reputation doesn't automatically transfer to other categories. Leading fabs deliberately diversify supplier shares to avoid over-reliance on any single vendor across multiple process steps, rarely entrusting multiple core equipment types to one supplier. While AMEC's service system in etching is mature, its field service and process support teams for new categories are still being built, lacking responsiveness and experience, which hampers customer adoption.
In the etching arena, AMEC is the domestic leader and a first-tier global player with a defensive advantage. But in thin films, CMP, and metrology, it's a latecomer chasing from behind, contending with both domestic rivals who got there first and international giants applying pressure from above. Platform expansion forces the company to fight on multiple fronts simultaneously, creating a strategic dilemma of allocating resources between defending its core business and attacking new segments. If the pacing is mismanaged, AMEC risks seeing its old turf eroded without breaking through in new areas.
Last night, a major shareholder holding over 5% concluded its stake reduction. On September 10, 2026, AMEC disclosed that Xunxin (Shanghai) Investment, which acquired shares pre-IPO and is neither a controlling shareholder nor actual controller, sold 17.622 million shares between June 23 and September 9, cashing out 6.228 billion yuan at an average price of about 353 yuan per share, with a range of 313.50 to 429.31 yuan. The reduction fell just shy of the 2% cap, as the actual sale hit 1.84% of total shares, with only 1.1175 million shares left unsold before early termination. Post-reduction, Xunxin still holds 65.745 million shares, or 6.86% of the company. The timeline: May 23 disclosed the plan to reduce up to 2%, May 28 executed a 10-for-4.9 stock bonus (raising total shares from 6.288 billion to 9.37 billion), June 23 to September 9 carried out the reduction, and September 10 announced early completion. The selling price range corresponded to a market cap of roughly 300 to 400 billion yuan, a high zone.
Why Just One Company's Financials?
Looking at the interim report, revenue hit 6.691 billion yuan with attributable net profit of 2.825 billion yuan. But stripping out 1.703 billion yuan in non-recurring items, the real operating profit is only 1.123 billion yuan, meaning non-recurring gains account for 60% of reported net profit. Revenue grew 34.89% year-over-year, and non-GAAP profit grew 108%, indicating genuine margin improvement. However, the 300% surge in attributable net profit is essentially driven by asset sales and fair value changes. This is a key indicator that the company's platform expansion carries financial engineering elements, though operational efficiency is clearly trending better.
In terms of business structure, etching remains the core, with a 60:1 high-aspect-ratio etcher becoming a customer favorite in mass production, achieving uptime above 90%. The next-generation 90:1 ultra-high-aspect-ratio tool is already in client validation. Thin films form the second pillar, with tungsten film deposition systems securing high-volume orders and moving into volume production, while the new PECVD system achieves internationally competitive deposition speed, uniformity, and throughput. ALD molybdenum is entering production line verification. Coverage targets show the company currently covers over 30% of front-end IC equipment, aiming for more than 60% of high-end IC tools and 70% of advanced packaging equipment in five years. Platform signals include shortening new product development from 3-5 years to under 2 years and advancing R&D on over 20 new tools across six major categories.
On the order and cash flow front, inventory and contract liabilities serve as leading indicators for equipment makers. AMEC doesn't separately disclose backlog, but investor relations records confirm that thin film equipment orders are full. The balance sheet shows the company in a high delivery and expansion phase: inventory at 7.666 billion yuan, up 6.9%, with raw materials at 3.362 billion yuan, up 27.6% for strategic stocking, while goods in transit fell 11.0% to 3.178 billion yuan, reflecting faster delivery recognition. Operating cash flow of 685 million yuan rose 237% year-over-year, but capital expenditure, including 777 million yuan for fixed assets and 680 million yuan in capitalized development costs, totals about 1.46 billion yuan, fueling construction of the Lingang Phase 2, Guangzhou, and Chengdu bases.
Disclaimer: This content is based on public data and quantitative analysis for reference only and does not constitute investment advice. Market risks exist, and investment decisions should be made independently based on personal risk tolerance, financial conditions, and investment objectives, with consultation from licensed professionals when necessary. Past performance does not guarantee future returns. Data sources: AMEC 2026 interim report, stake reduction announcement, August 2026 investor relations activity records, and Wind Financial Terminal.
Comments