Minsheng Securities released a research report stating that the NAND sector will continue to drive increased investment in deposition equipment (due to the need for more deposition/etching tools to stack layers), high-aspect-ratio etching technology, and advanced packaging/bonding equipment. As overseas manufacturers upgrade their capacity and domestic players like YMTC and CXMT expand production, China's share in the global storage market is expected to grow gradually.
Amid ongoing U.S.-China tech competition and rising AI computing demand, Minsheng Securities recommends monitoring future catalysts. Demand for etching, deposition, bonding equipment, and CMP tools is increasing. Key takeaways from the report include:
1. **Global Semiconductor Equipment Demand Growth**: SEMI forecasts global semiconductor equipment sales to reach a record $125.5 billion in 2025, driven by capacity expansion for advanced logic and storage to support AI applications, as well as process upgrades across major segments. China is projected to lead global 300mm equipment spending, with investments totaling $94 billion from 2026 to 2028.
- Logic advancements will boost demand for etching, thin-film deposition, bonding, and lithography equipment. - The rise of HBM drives demand for wafer thinning, TSV etching/filling, and wafer stacking packaging.
2. **AI Infrastructure Boosts Logic and Storage Markets**: IDC predicts data center investments will grow from $17 billion in 2020 to $45.3 billion by 2028. Reports indicate OpenAI plans to deploy 6 GW of AMD GPU computing power in coming years. Deploying 1 GW of AI computing requires ~$50 billion, with two-thirds allocated to chips and data center infrastructure.
- AI semiconductor revenue is expected to surge from $8.2 billion in 2020 to $41.3 billion by 2030 (24.4% CAGR). - TrendForce notes AI inference servers (e.g., ChatGPT) will drive enterprise SSD demand, while DRAM supply tightens due to advanced process allocations for Server DRAM and HBM, lifting prices for legacy products.
3. **Domestic Storage Gains Global Share**: Capacity expansions by YMTC and CXMT will enhance China’s position in the global storage market.
4. **Supply Chain Challenges and Localization**: - Restrictions on semiconductor equipment persist. A U.S. bipartisan probe revealed loopholes allowing China to purchase $40 billion in advanced chipmaking tools. New proposals aim to broaden export bans. - NVIDIA’s Jensen Huang stated the company fully exited China’s market due to U.S. export controls, with its market share dropping from 95% to 0%. Domestic AI chip demand is expected to rise as China advances its computing infrastructure.
**Risks**: Slower-than-expected capacity expansion, delays in localization, and technological bottlenecks.