China's Domestic Etch Equipment Rapidly Displacing Imports at CXMT

SemiAnalysis published data on June 26, 2026 showing China's front-end etch equipment imports are down 18% year-to-date while deposition imports are up 3% YTD [1], arguing domestic etch substitution is advancing faster than deposition. Channel checks identify Naura as the largest ICP etch supplier at CXMT — China's leading DRAM manufacturer — with further share gains expected as CXMT expands capacity [2]. The divergence between etch and deposition import trends is the thread's core data point.

CXMT is China's primary vehicle for domestically produced DRAM. If Naura has become the dominant etch supplier there, it means Chinese chipmakers are already substituting foreign etch tools at scale for advanced memory production — a more concrete indicator of equipment localization progress than aggregate import statistics alone.

China's front-end etch equipment imports fell 18% year-to-date through mid-2026 while deposition imports rose 3% over the same period, according to SemiAnalysis [1]. The firm argues this divergence reflects a structural difference in localization pace: domestic etch tools are displacing foreign imports at a materially faster rate than domestic deposition tools are. The contrast is notable because both categories are essential to wafer fabrication, but the data suggests etch toolmakers achieved substitution-ready maturity first.

The primary actor SemiAnalysis identifies is Naura, which its channel checks place as the largest ICP etch supplier at CXMT [2]. CXMT is China's most advanced DRAM producer and a natural test case for how far domestic equipment has progressed in memory fab applications. Naura's position at CXMT is presented not as a trial deployment but as a leading-share arrangement, implying it has already displaced foreign suppliers in at least some etch steps. SemiAnalysis expects Naura's share to grow further as CXMT adds capacity.

The broader import context shows a market that until recently was still absorbing large volumes of foreign equipment. China's semiconductor machinery imports hit record levels in 2025 [3] and reached $33.5 billion in 2024 with 29% volume growth [4], suggesting the current etch import decline represents a genuine directional shift rather than a continuation of prior trends. A Morgan Stanley note from June 2026 described April data as showing 'mixed signals' [5], leaving open whether the etch decline is accelerating or stabilizing.

At this stage the story rests primarily on SemiAnalysis's import data and channel checks, published as a two-tweet thread on June 26. Independent corroboration of Naura's specific share position at CXMT, or of the etch-versus-deposition divergence from other analysts, is not yet present in the available material.