China's chip equipment rally faces earnings test amid memory boom

As China's semiconductor equipment sector embarks on its first-half earnings season, it faces heightened scrutiny amid a widespread stock rally that has attracted numerous investors. This surge includes manufacturers of etching, thin-film deposition, cleaning, and testing machinery, fueled by expectations that an upcoming wave of chip spending in China will favor domestic suppliers. Companies such as Kingsemi, Hangzhou Changchuan Technology, Accotest, Skyverse Technology, and Wuhan Jingce Electronic Group have reported gains. Investors are now seeking tangible evidence that advancements in memory-chip production, shifts in advanced packaging, and Beijing's push for self-reliance will result in increased orders, revenue, and sustainable profit margins. A cohort of 14 prominent Chinese chip equipment firms monitored by Soochow Securities recorded total revenues of 90 billion yuan ($13.1 billion) in 2025, marking a 35% increase year-on-year. In the first quarter of 2026, revenue climbed 32% to 21.78 billion yuan, with net profits soaring 61% during the same timeframe.