AMEC Profit to Nearly Quadruple as China Fabs Build Out

AMEC Profit to Nearly Quadruple as China Fabs Build Out

China's top chip-tool maker, Advanced Micro-Fabrication Equipment China (AMEC), said on Monday that its first-half net profit will nearly quadruple, the strongest signal yet that Beijing's semiconductor self-sufficiency drive is translating into hard earnings for domestic equipment suppliers. Based on unaudited figures filed to the Shanghai Stock Exchange, the Shanghai-based company expects income between January and June of at least 2.7 billion yuan (US$400 million), a year-on-year increase of 282 per cent, with the upper limit of growth reaching 311 per cent, or a net profit of 2.9 billion yuan.

Tags: AMEC, chip equipment, semiconductor, China technology, etching equipment, Shanghai Stock Exchange, semiconductor equipment index, US export controls, chip self-sufficiency, ChangXin Memory, YMTC, wafer fabrication

The Numbers Behind AMEC's First-Half Surge

The profit jump is not purely operational. AMEC said nearly 2 billion yuan of the gain came from investment and fair-value income, including the sale of shares in fellow equipment maker Piotech earlier this year. Strip those out, and the company's adjusted profit still doubled during the first half — evidence that core demand is real, not an accounting mirage. Revenue for the period rose 35 per cent from a year earlier to 6.7 billion yuan.

Investors took notice. AMEC shares closed up 2.55 per cent in Shanghai on Tuesday, while the semiconductor equipment index compiled by Wind — which tracks more than 20 mainland-listed firms — advanced more than 7.61 per cent. The stock move came as AMEC became the first of China's major chip-equipment makers to issue a first-half earnings preview, making its numbers an early bellwether for a sector riding the wave of domestic wafer-fab construction.

A Bellwether for China's Chip-Equipment Sector

The sector's momentum predates AMEC's preview. Combined revenues at 14 major Chinese semiconductor-equipment companies rose 32 per cent from a year earlier in the first quarter, while their combined adjusted profits increased 29 per cent, according to Soochow Securities. AMEC, which produces etching equipment — a crucial step in chipmaking — said a new machine that once took three to five years to develop now reaches the market in two years or less, with key performance indicators it says meet internationally advanced standards.

That speed-up matters beyond one company's balance sheet. China's domestic equipment industry has spent years closing the gap with foreign rivals on process tools, and the earnings preview suggests the localization push is reaching an inflection point where scale and profitability compound together. The industry's 32 per cent revenue growth in the first quarter, followed by AMEC's 35 per cent revenue expansion in the first half, points to a sustained build-out rather than a one-quarter spike.

Memory-Fab Spending Fuels the Next Wave

The next leg of demand is expected to come from memory makers. Bernstein forecasts that China's wafer-fabrication equipment spending will rise from US$58 billion in 2026 to US$77 billion in 2028, largely because of increased investment by ChangXin Memory Technologies and Yangtze Memory Technologies Corp. US restrictions on advanced chipmaking equipment are also pushing domestic fabs to qualify more locally produced alternatives, expanding AMEC's addressable market even as foreign toolmakers are locked out of the most advanced nodes.

Analysts note the combination is potent: a captive market forced by sanctions, a state-backed push for self-sufficiency, and memory producers whose expansion plans are measured in tens of billions of dollars. For equipment suppliers, that translates into multi-year order visibility — the kind of backlog that lets companies like AMEC invest aggressively in new product lines while competitors elsewhere face export-licensing uncertainty.

Memory production is a particularly demanding customer for etch and deposition toolmakers. As 3D NAND makers stack more layers and DRAM producers push toward higher-density designs, wafer fabs need plasma etchers capable of high-aspect-ratio processing and thin-film systems with atomic-level control — precisely the categories AMEC has built its portfolio around. That alignment means the memory build-out is not just another sales cycle for Chinese equipment firms; it is a test of whether domestic tools can handle the process complexity that historically favored foreign incumbents at the leading edge.

Japan's Equipment Giants Face a Faster, Closer Rival

For Japan, the implications are direct. Tokyo Electron, Nikon, Canon and Screen Holdings are among the global leaders in the same equipment categories AMEC is targeting, and China has historically been one of the most important export markets for Japanese semiconductor gear. Japan joined the United States in tightening export controls on advanced chipmaking equipment to China, restrictions that took effect in July 2023 and have been expanded since — a policy stance that narrowed the legal market for Japanese suppliers while accelerating Beijing's determination to build its own.

The result is a structural shift in the Asia-Pacific supply chain. As Chinese fabs qualify domestic etching, deposition and metrology tools, the share of the world's largest equipment-buying market captured by Japanese and other foreign suppliers shrinks. AMEC's stated target of covering at least 60 per cent of high-end equipment needs within five years is, in effect, a direct challenge to the incumbent oligopoly that Tokyo Electron and its peers have long dominated. Japanese suppliers still lead in advanced logic and leading-edge memory processes, but the competitive ground under that leadership is eroding node by node.

Founder's Ambition: 100 Tools, 60% of High-End Gear

AMEC founder and chairman Gerald Yin Zhiyao laid out the roadmap at a corporate event on Saturday, saying the company aims to offer more than 100 types of equipment within five years, covering at least 60 per cent of the high-end gear needed for chip production, according to China's state-run Xinhua News Agency. That would represent a major expansion from the 54 types of high-end semiconductor equipment the company has developed so far — 26 plasma etching systems plus 24 thin-film deposition, chemical mechanical polishing and metrology tools — according to China Daily.

Yin has previously set an even longer horizon: AMEC joining the global top tier of semiconductor-equipment suppliers by 2035, measured by scale, product competitiveness and customer satisfaction. The company's accelerated development cycle — from three to five years down to two — suggests the trajectory is steepening, though industry analysts caution that closing the gap on the most advanced deposition and inspection tools, where Applied Materials, Lam Research and Tokyo Electron hold formidable leads, will require sustained engineering investment rather than simply more fab orders.

What to Watch For

The next milestones are concrete. AMEC's full first-half results will test whether the adjusted-profit doubling holds once audited, and the pace of new-tool qualification at ChangXin Memory and YMTC will show how quickly domestic equipment can move into high-volume memory production. For Tokyo and the broader Asia-Pacific semiconductor complex, the question is how far China's equipment self-sufficiency can advance before it reshapes not just market share, but the pricing power and R&D economics of the global toolmaking industry.

Japanese suppliers still hold commanding positions in advanced process gear, and export controls remain a live policy instrument in both Tokyo and Washington. But AMEC's earnings preview is a reminder that the sanctions era has a second act: every restriction that pushes Chinese fabs toward domestic tools is simultaneously funding the competitors those controls were meant to constrain. For Asia-Pacific readers, the chip-equipment race is no longer a distant trade-war footnote — it is now visible in quarterly earnings reports.

By Kenji Tanaka, Staff Writer

This article was produced with AI-assisted research and editorial support. Reporting is based on sources cited in the article.