Guosen Securities has released a research report expressing optimism about the growth prospects for the semiconductor equipment sector, driven by surging AI demand, memory capacity expansion, advanced process and packaging upgrades, as well as import substitution. The firm recommends focusing on market segments with relatively low domestic localization rates, including front-end film thickness and OCD metrology tools, wafer probers, high-end probe cards, semiconductor test equipment, wafer dicing saws, semiconductor vacuum pumps, and vacuum coating systems.
These segments are currently at a critical juncture where customer qualifications are accelerating, orders are gradually ramping up, and domestic market share is expanding, offering significant growth elasticity.
Industry Landscape: AI Leads the Current Cycle with Structural Supply-Demand Tightness in Logic and Memory
From an industry fundamentals perspective, logic and memory chips serve computing and data storage functions respectively, making them the two core hardware pillars of the AI computing system. North American cloud providers continue to raise capital expenditure guidance, with demand transmitting along the AI server chain into advanced logic, HBM, and enterprise storage. On the logic front, advanced node capacity expansion remains constrained by CoWoS and other advanced packaging capabilities. On the memory side, non-linear AI demand growth combined with HBM's crowding out of traditional DRAM capacity results in relatively slow supply release, collectively reinforcing the sustainability of this upcycle.
Equipment Beneficiaries: Capacity Expansion and Technology Upgrades Plus Import Substitution
The current prosperity cycle in the semiconductor equipment industry revolves around four main themes: AI demand, memory expansion, advanced processes and packaging, and import substitution. First, the accelerated development of AI servers and domestic computing chips is driving increased demand for logic and memory chips. Second, advanced process upgrades and CoWoS packaging expansion are further driving equipment investment in etching, thin film deposition, metrology and inspection, cleaning, testing, and packaging. Third, different chip roadmaps create differentiated demands: advanced logic relies more heavily on lithography and metrology; 3D NAND layer count increases primarily drive etching, thin film deposition, and CMP; while DRAM miniaturization and HBM development further increase investment in metrology and inspection, deep hole processing, wafer thinning, advanced packaging, and test equipment. Fourth, the domestic localization rate of semiconductor equipment continues to rise. As overseas equipment export restrictions tighten, domestic wafer fabs have a stronger need for supply chain security and equipment self-sufficiency, providing more opportunities for domestic equipment qualification and batch adoption. Combined with maturing technology from local manufacturers, domestic equipment makers are now entering a golden window for import substitution.
The brokerage favors segments within semiconductor equipment with low localization rates, where leading domestic players in select niches are entering crucial periods of customer adoption, order inflows, and market share gains. Specifically, advanced process and memory expansion are continuously increasing demand for front-end metrology tools such as film thickness measurement, OCD, and electron beam inspection, with domestic equipment transitioning from verification trials to bulk purchases. Wafer probers, MEMS probe cards, and memory testers are accelerating entry into top-tier customers, supported by the rising complexity of HBM, advanced packaging, and high-end chip testing. Meanwhile, semiconductor vacuum pumps, wafer dicing saws, and vacuum coating systems are making sustained breakthroughs in core performance and reliability, expected to move from point breakthroughs to scale deployment, thereby continuously boosting domestic market share.
Risk Warnings
Investment in the semiconductor industry may fall short of expectations, equipment import substitution may proceed slower than anticipated, there is shareholder reduction risk, high valuations may not match earnings performance, macroeconomic and cyclical fluctuations could occur, and geopolitical and trade compliance risks remain.
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