AsianFin -- Investment in China’s semiconductor industry continued to contract in the first half of 2025, reflecting ongoing cyclical adjustments in the sector, though the decline was far smaller than in the previous year. Spending patterns are also shifting, with more capital flowing into chipmaking equipment as China seeks to strengthen domestic supply chains.

According to a report released Thursday by Chinese market research firm CINNO Research, total investment in China’s semiconductor sector fell 10% year-on-year in the six months ended June 30, reaching CNY455 billion (USD63.3 billion). By comparison, investment plunged 42% in the same period last year, dropping to CNY683.1 billion (USD95 billion).

Semiconductor equipment was the only segment to post growth in the first half of the year. Investment in equipment jumped 53% year-on-year to CNY34.7 billion (USD4.8 billion), signaling China’s push to localize chipmaking tools amid U.S. technology restrictions, CINNO Research said.