Introduction

China’s rapid expansion of its foundational (also referred to as mature or legacy) semiconductor manufacturing capacity is raising concerns outside China of overcapacity, pricing pressures, and a loss of competitiveness for non-Chinese producers that will ultimately lead to more dependence on China. The effects of China’s rapid ramp up in capacity are already being felt outside of China, as Silverado detailed in its Foundational Fabs report. The latest Chinese import data indicate that China imported a record amount of semiconductor manufacturing equipment (SME) in 2025. Combined with likely increases in domestic production of SME by firms in China (according to estimates and partial year data from firms like Yole , Global Net , and MIR Databank ), these data indicate that China continued to ramp up foundation semiconductor capacity in 2025.

Background

China is steadily increasing production capacity and global market share in foundational semiconductors. This trend continued in 2025, with China accounting for about 37 percent of the global SME market in the first three quarters of 2025, according to SEMI data . This expansion will lead to China accounting for more than 40 percent of global foundational semiconductor manufacturing capacity by the early 2030s, according to estimates from Bloomberg.

Record 2025 Chinese Imports

China’s imports of semiconductor manufacturing equipment reached a record high of $51.1 billion in 2025, up 4 percent from 2024 levels according to official Chinese import statistics sourced from Global Trade Tracker. Japan and the Netherlands were the two largest import sources, followed by Singapore and the United States. The share of imports from the United States significantly declined over the last decade, falling from 23 percent in 2016 to 9 percent in 2025. China’s imports from countries that were not among the top five suppliers in the last three years grew substantially, rising by 28 percent from 2024 to 2025. Lithography continued to account for the largest share of equipment imports in 2025.

Silverado’s Recommendations

The United States should use policy flexibility created through the recent affirmative finding in the Section 232 investigation to develop a menu of remedial actions, such as component tariffs and export controls on SME, against semiconductors imported directly or indirectly from the PRC. Allies and partners should be incorporated into remedial actions to the maximum extent possible to prevent the PRC from undermining production that is essential to each partner’s national security interests.