Sinolink Securities has released a research report indicating that the global expansion of AI computing power and HBM memory production capacity is driving robust demand for semiconductor equipment. The growth prospects are particularly strong in the back-end testing and front-end metrology/inspection segments.
From an industry chain perspective, testing is a core quality control step in midstream packaging and testing. Testers account for approximately 63% of the value in back-end testing equipment. The industry's value distribution is being reshaped by Moore's Law, with back-end final test equipment being driven by technologies like 3D stacking and Chiplet, leading to significantly increased testing complexity and per-unit value. The global market is projected to grow at a CAGR of 7.5% from 2026E to 2030E. Meanwhile, front-end metrology and inspection equipment is crucial for quality control throughout the entire wafer fabrication process, representing about 13% of the global semiconductor equipment market value. This segment is expected to achieve a CAGR of 10.8% from 2026E to 2030E.
Currently, both major segments are highly monopolized by overseas leaders. The top two players hold a combined 99% global market share in memory testers, while the localization rate for domestic metrology/inspection equipment in China is only 1%-10%, lagging in substitution progress. With downstream memory capacity expansion, tight overseas equipment delivery, and continuous technological breakthroughs, there is significant room for domestic substitution in final test and metrology/inspection equipment. The key points from Sinolink Securities are as follows:
Memory Expansion Cycle Begins, Driving Semiconductor Equipment Demand
Memory chip volumes and prices are rising, leading to a structural increase in global capital expenditure. On the demand side, AI computing power is driving an explosion in demand for high-end memory, with AI servers requiring significantly higher DRAM and NAND content than traditional servers. On the supply side, overseas memory leaders are allocating most of their advanced process capacity to HBM and high-end DDR5, squeezing capacity for general-purpose memory. This widening supply-demand gap is pushing up both volume and prices for memory chips. In this context, capital expenditure by overseas leaders has surged sharply. Micron Technology has planned capital expenditure as high as $27 billion for 2026, a year-on-year increase of 70.3%. Coupled with the imminent listings and potential capacity expansions of domestic memory manufacturers, global memory makers are undergoing a structural upward adjustment in capital spending.
Semiconductor Equipment Market Expands Across the Board, Testing Segment Shows Outstanding Growth
SEMI data indicates the global semiconductor equipment market will continue to expand from 2024 to 2027E, growing from $116.6 billion in 2024 to $155.6 billion in 2027E. Among the segments, testing equipment shows significantly higher growth elasticity, with a compound annual growth rate of 21.1% from 2024 to 2027E. It is expected that with the surge in demand for AI chips and automotive power devices, chip testing demand will continue to rise, supporting sustained high growth rates for testing equipment in the medium to long term.
Supply-Demand Mismatch for Overseas Vendors Creates New Opportunities for Domestic Substitution
Pressure on overseas equipment delivery presents a good opportunity for domestic manufacturers to expand globally. In 2026, lead times for global semiconductor components have significantly lengthened, with automotive-grade 32-bit MCU lead times exceeding 52 weeks, and SiC and analog IC lead times also reaching 25-40 weeks and 20-48 weeks, respectively. Constrained by shortages of core components and saturated capacity, overseas semiconductor equipment companies have extended delivery cycles for mainstream front-end and memory-supporting equipment to 12–24 months, while also implementing price increases. Expansion plans by leaders like Samsung, SK Hynix, and Micron Technology are hampered by equipment supply bottlenecks, making them urgently seek diversified equipment suppliers to secure production capacity. Leveraging technological advancements, efficient delivery, and cost advantages, domestic semiconductor equipment companies are seeing accelerated opportunities for overseas verification and order fulfillment, potentially opening up incremental space through global expansion.
Accelerated Progress in Domestic Substitution for Semiconductor Equipment, Significant Order Growth for Core Companies
Due to high technical barriers in segments like lithography, coater/developer, and metrology/inspection, there remains significant room for improvement in the current localization rates. For example, the localization rate in the metrology/inspection segment is only 1%-10%, and in lithography, it's 0%-1%. As domestic companies achieve continuous technological breakthroughs, the semiconductor equipment sector is entering a golden window for import substitution. From an order perspective, contract liabilities for leading domestic equipment companies have been rising steadily from 2020 to 2025. Companies like AMEC, Piotech, and Skyverse have seen substantial growth in their order backlogs, which remained high overall in Q1 2026. The persistently rising contract liabilities and ample order backlogs fully demonstrate the strong willingness of downstream wafer fabs and memory production lines to procure domestic equipment, validating the logic of domestic substitution through batch adoption and industrial implementation of local equipment.
Key Risks to Consider
Global wafer fab capital expenditure may fall short of expectations; R&D progress and customer validation for high-end equipment may be slower than anticipated; risks related to geopolitical trade tensions and supply chain volatility.
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