China semiconductor equipment and materials: Fab capacity build-out and localization lead the way

We expect China's WFE market to record a ~19% CAGR in 2025-2030F. We introduce our China WFE TAM (total addressable market) model, using a bottom-up approach to derive domestic WFE TAM for China WFE vendors in a wafer fab capacity upcycle. In our baseline scenario, we forecast China's overall WFE market size to grow 27% y-y to USD55.4bn in 2026F and reach USD103.5bn in 2030F. The cumulative WFE spending would total USD407.3bn during 2026-30F, with domestic foundries and IDMs contributing ~97%. We estimate China's semiconductor self-sufficiency rate (SSR) was only ~34% in 2025F and would only reach ~47% in 2030F. By sales market share, China's overall equipment SSR was 26-27% in 2025F, with stripping equipment highest at 80-90%, etching and heat treatment at 50-60%, while lithography remains the bottleneck at only 1-2%. The silicon wafer market is now in an uptrend, and we project China's silicon wafer market revenue to record a ~15% CAGR over 2025-2030F, reaching USD6.9bn in 2030F. We