China’s Semiconductor Equipment Imports Plunge 24% as Spending Normalizes
After years of aggressive stockpiling driven by geopolitical anxieties, China’s appetite for foreign semiconductor equipment is finally showing signs of cooling. According to a March 23, 2026, research report from BofA Securities analyzing Chinese customs data, the country's semiconductor equipment imports fell 24% year-over-year in the first two months of 2026.
This data is highly relevant for tracking China sales among global semiconductor capital equipment (semicap) players. BofA estimates that China accounted for a staggering 34% of global wafer fabrication equipment (WFE) in 2025, cementing its status as a critical region for the industry. However, the latest figures suggest a shift toward normalization.
“China’s semiconductor equipment imports were US$3.7 billion / US$3.7 billion / US$2.2 billion in Jan–Feb 2026, below the previous three-month (Oct 2025–Dec 2025) average of US$4.9 billion and the previous 12-month (Jan 2025–Dec 2025) average of US$4.6 billion,” Bank of America analysts noted. “The year-on-year decline in January and February is consistent with expectations among most semiconductor equipment suppliers that China sales will normalize in 2026.”
Front-End Equipment Takes a Hit
The slowdown was particularly pronounced in front-end equipment, which constitutes the bulk of the imports. China imported 2.8 billion and 2.8billion and 1.3 billion worth of front-end equipment in January and February, respectively.
In February alone, front-end imports plummeted 28% year-over-year and 52% month-over-month. The analysts highlighted significant drops across key segments:
- Process control: $114 million (-54% yoy / -62% mom)
- Deposition: $216 million (-46% yoy / -76% mom)
- Etching: $288 million (-27% yoy / -48% mom)
- Ion implanters: $62 million (-23% yoy / -44% mom)
- Lithography: $342 million (-10% yoy / -33% mom)
The only segment to buck the trend in February was heat treatment, which saw a modest 3% year-over-year increase to $87 million, though it still declined 13% month-over-month.
Year-to-date, front-end imports sit at $4.1 billion, down 23% compared to the same period last year.
Lithography: The Dutch Connection
Lithography equipment, the most critical and heavily scrutinized segment of semiconductor manufacturing, also experienced a sharp contraction. Following a weak January where imports fell 41% year-over-year, February saw a 10% YoY and 33% MoM decline in import value to $342 million.
A closer look reveals China's continued reliance on the Netherlands—home to ASML Holding NV—for these advanced machines. BofA data indicates that lithography machines from the Netherlands accounted for 86% of all lithography import value in February 2026, despite only representing 23% of the total units. This disparity is driven by the massive cost of Dutch equipment; the average selling price (ASP) of a Netherlands lithography machine was four times that of the overall average in February.
Interestingly, while the volume of Netherlands lithography machines dropped 29% YoY in February, the ASP surged 22% YoY to 59.0 million, pushing well above the previous 12−month average of 59.0 million,pushing well above the previous 12−month average of 47.7 million.
Semicap Suppliers Brace for a Flat Year
The import data aligns closely with the cautious tone struck by major Western semicap executives during recent earnings calls. Management from Applied Materials Inc., Lam Research Corp., and KLA Corp. have all guided for a "flattish" year in China for 2026.
As BofA points out, tracking this customs data is a reliable proxy for supplier performance. "On an annual basis, the disclosed China equipment sales of the five largest semi equipment companies... total to ~75% of the customs import total for front-end semi equipment over the same period," the report stated.
The current trajectory suggests that the panic-buying phase, spurred by fears of tightening U.S. export controls, may have peaked. As Western suppliers look toward AI and leading-edge foundry logic to drive growth elsewhere, China's slice of the global WFE pie is expected to shrink from its historical highs, returning to a more sustainable baseline in 2026.
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