A wave of sales growth is sweeping through China's semiconductor manufacturing equipment makers. On August 19, 2026, JW Insights reported that major companies posted double-digit sales growth, with some seeing profits rise more than 300% to over 400%. Delivery times for foreign-made equipment have stretched to as long as 24 months in some cases, creating an opportunity for Chinese makers to fill the supply gap, the report said. But a look back at exchange disclosures shows that "400%" is not a reliable yardstick for the industry's earning power. The strength of demand and the quality of profits need to be read separately.
The Loss-to-Profit Swings and Fair-Value Gains Behind the "400% Increase"
The company closest to a figure above 400% is thin-film deposition equipment maker Piotech, in its first quarter of 2026. The company's revenue rose 56.97% year-on-year to RMB 1,112.43 million, and net profit attributable to parent company shareholders came to RMB 570.60 million. In the same period a year earlier, the company had posted a loss of RMB 146.95 million. The company listed its net profit growth rate as "not applicable," since a loss base makes a standard growth-rate calculation meaningless.
Looking at the profit breakdown changes the picture further. Piotech's non-recurring gains and losses totaled RMB 468.49 million, accounting for about 82% of attributable net profit. Of that, RMB 472.61 million came from gains and losses related to changes in the fair value of financial assets and their disposal. Net profit excluding non-recurring items was RMB 102.11 million, turning positive from a loss the previous year. The core business did improve. However, that improvement cannot accurately be described as a "400% increase."
Applying the same breakdown to AMEC (Advanced Micro-Fabrication Equipment) and ACM Research Shanghai reveals differences between companies as well.
| Company / Period | Revenue | Attributable Net Profit | Net Profit Excluding Non-Recurring Items | Key Takeaway |
|---|---|---|---|---|
| Piotech, Jan–Mar 2026 | RMB 1,112.43 million, up 56.97% | RMB 570.60 million, from loss to profit | RMB 102.11 million, from loss to profit | Non-recurring items accounted for about 82% of attributable net profit |
| AMEC, H1 2026 forecast | RMB 6,691.0 million, up approx. 34.89% | RMB 2,700–2,900 million, up 282.48–310.81% | RMB 1,000–1,200 million, up 85.61–122.73% | Gains from equity investment valuation and returns totaled RMB 1,982.0 million |
| ACM Research Shanghai, H1 2026 | RMB 3,718.0 million, up 13.87% | RMB 989.0 million, up 42.14% | RMB 571.0 million, down 15.31% | Attributable net profit and core-business profit moved in opposite directions |
What the table clearly shows is that all three companies achieved double-digit revenue growth. AMEC is projecting substantial profit growth even after excluding non-recurring items, and Piotech swung back into the black. ACM Research Shanghai, on the other hand, saw its profit excluding non-recurring items decline. When each company's attributable net profit is bundled into a single growth rate, it obscures how much profit equipment sales themselves actually generated.
Equipment Demand Set to Swell to $165.9 Billion
Even setting aside the headline-grabbing profit surges, the core fact of rising demand remains. SEMI forecasts that global semiconductor manufacturing equipment sales will reach $165.9 billion in 2026, up 23.2% from the previous year. Wafer fab equipment (WFE), which includes front-end tools, is expected to grow 23.1% to $143.9 billion, test equipment 31.0% to $15.3 billion, and assembly and packaging equipment 9.6% to $6.7 billion.
Beyond advanced logic, memory investment is also driving growth. DRAM equipment used for high-bandwidth memory (HBM) is projected to grow 39.0% to $38.8 billion, and NAND equipment 30.7% to $13.9 billion. AI accelerators are built using advanced-process compute dies, combined with HBM, and completed through complex packaging and rigorous testing. As the number of process steps and the intensity of inspection increase, orders are expanding not only in front-end processes—from deposition to cleaning—but also in metrology and testing.
In actual 2025 results, China was the largest equipment market. Sales there totaled $49.3 billion, down 0.5% from the previous year but still accounting for about 36.5% of the global total of $135.1 billion. Together with Taiwan and South Korea, these three regions accounted for 79% of the global market. The sheer size of the Chinese market also provides a large base of opportunities for domestic equipment makers to validate their tools at customer fabs and refine process conditions.
However, that $49.3 billion figure represents the total value of equipment sold in China—not the sales of Chinese equipment makers, nor a domestic-production ratio. This massive market includes equipment from ASML, Applied Materials, and Lam Research. Tokyo Electron and KLA are also suppliers. The growth in sales achieved by Chinese vendors and the breadth of processes where their tools can actually substitute for foreign ones must be measured separately.
"24 Months" Is Not a Universal Delivery Time for All Equipment
The maximum figure of 24 months cited by JW Insights, based on industry sources, applies to certain types of equipment only. ASML is the company most often associated with semiconductor manufacturing equipment in this context, but ASML has not officially stated a 24-month delivery time across all its equipment models. Shipping conditions vary depending on the type and configuration of equipment, as well as on customers and export licenses, so it would be inaccurate to say that "all foreign-made equipment now requires a two-year wait."
Even so, there is evidence that the supply chain is now operating on a multi-year horizon. In its Q2 2026 earnings report, ASML stated that bookings in the first half of the year were very strong and that customers' capacity expansion plans have made it easier to forecast long-term demand. The company plans to increase its Low-NA EUV production capacity, currently at about 65 units in 2026, along with about 130 DUV immersion lithography systems, by 30% in 2027. It is also considering a further 30% increase in 2028.
Applied Materials' sales terms similarly assume a long planning horizon. As of the March 2025 version of its terms, the company requires customers to update a two-year equipment order forecast every quarter, and formal purchase orders must be submitted at least 180 days before the scheduled shipment date. This does not mean actual delivery times are uniformly two years. But at least in dealings with Applied Materials, securing components and production capacity, and finalizing customer specifications, presupposes a planning horizon of six months to two years.
This time lag creates an opportunity for Chinese equipment makers. If a wafer fab cannot wait for foreign equipment, and a domestic tool can be delivered by the time it's needed, evaluation on the mass-production line can begin. This applies to front-end processes from deposition to cleaning and CMP, as well as metrology and inspection—areas where Chinese companies already have products. A shortage of lithography equipment, however, cannot be directly offset by equipment used in other process steps.
Beyond Fast Delivery: Mass-Production Qualification and Financial Burden
Piotech attributes its 56.97% revenue growth to equipment for advanced processes passing customer validation and expanding into mass production. Getting equipment to the fab quickly is only the entry point; what sustains revenue is mass-production qualification. Wafer fabs check film thickness, uniformity, defect rates, and yield at each process step. Only once utilization rates and maintenance systems also meet requirements do reorders of the same equipment—or its adoption for other processes—move forward.
The time required to reach mass production builds up on equipment makers' balance sheets. As of the end of March 2026, Piotech's inventory stood at RMB 8,213.53 million, and contract liabilities—corresponding to advance payments received from customers—stood at RMB 4,877.32 million. Even after equipment is manufactured and shipped, there are cases where revenue cannot be recognized until installation and calibration are complete and the process moves from validation to final acceptance. The stronger the order backlog, the more funding is needed to carry components and work-in-progress inventory in advance.
The company's operating cash flow in the first quarter was negative RMB 519.85 million, compared with a positive RMB 10.93 million in the same period a year earlier. The company explained that while collection of sales proceeds temporarily declined, procurement and labor costs rose as the business expanded. Even when net profit is positive, cash flows out during the process of moving toward mass production and payment collection. Whether revenue growth is sustainable depends on whether inventory can be converted into deliveries, whether contract liabilities can be converted into accepted revenue, and whether payments can actually be collected.
Regulations That Open a Market While Narrowing Procurement Routes
In December 2024, the U.S. Commerce Department's Bureau of Industry and Security (BIS) newly restricted 24 types of semiconductor manufacturing equipment, three types of development and manufacturing software, and high-bandwidth memory. It also added 140 entities—including Chinese equipment makers, wafer fabs, and investment firms—to the Entity List. As uncertainty grows around procuring foreign equipment, Chinese wafer fabs are accelerating validation of domestic products. Short delivery times help them secure a slot in that validation queue.
At the same time, Chinese equipment makers also rely on global component networks. If U.S.-origin technology is embedded in vacuum components, power supplies, various sensors, or control software, tightened regulations could make the conditions for development and production expansion more difficult. Since demand to replace imported products and risk to a company's own component procurement can arise simultaneously, tightened regulations cannot simply be equated with higher profits.
The figures that should be used to judge the second-half 2026 earnings reports are more concrete than flashy net profit growth rates. Do revenue and profit excluding non-recurring items grow in the same direction? Does equipment that has passed customer qualification lead to reorders? Do inventory and contract liabilities convert into revenue, and does operating cash flow improve? These three factors will be the key criteria for determining whether the supply gap created by delivery times of up to 24 months translates into a lasting market share for Chinese equipment makers. Developments in component procurement, maintenance systems, and regulatory changes also need to be tracked alongside them.