China is expected to remain the top investor in chipmaking equipment in 2025, despite a 24% year-over-year decline, with global semiconductor investments rising 2% to $110 billion, driven by the growing demand for AI chip production.
China is set to maintain its position as the largest investor in new computer chipmaking equipment in 2025, despite experiencing a significant year-over-year decline, according to a report by the industry group SEMI. The country, which has long been the largest consumer of chips, is expected to invest $38 billion in chip manufacturing tools next year, down 24% from $50 billion in 2024. However, this spending still surpasses that of South Korea, where investments are projected to reach $21.5 billion in 2025, and Taiwan, which is expected to invest $21 billion.
Global investment in semiconductor equipment is forecast to rise 2% in 2025, totaling $110 billion. This marks the sixth consecutive year of growth, driven largely by the demand for tools to produce chips for artificial intelligence (AI) applications. SEMI has also predicted that the impact of AI on chipmaking will accelerate in 2026, with a projected 18% growth in investment.
China's increased spending in the chip sector is part of a broader strategy to reduce the country's dependence on imported chips, spurred by U.S. government restrictions. Since mid-2023, China has ramped up efforts to expand its chipmaking capacity with strong governmental support.
While Chinese investments are declining, the country remains ahead of other regions, such as South Korea, where major companies like SK Hynix and Samsung Electronics are expanding memory chip production. Taiwan, home to the world’s leading foundry TSMC, continues to be a major player in the AI chip market, manufacturing chips for companies like Nvidia.
The global shift towards AI-driven chip demand has bolstered the fortunes of major equipment manufacturers, including ASML, Applied Materials, and KLA. ASML, in particular, is forecast to achieve sales between $32 billion and $38 billion in 2025, holding a dominant share in the lithography market.
Despite the decline in China’s spending, its ongoing investment in the semiconductor sector highlights its commitment to strengthening domestic chip production, with plans to reduce reliance on foreign technology amid rising geopolitical tensions.
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