Yu Jia, a China technology analyst at UBS Securities, wrote that the broker mildly lowered its 2025-26 forecast for China's wafer fabrication equipment (WFE) spending by 2% and 1%, mainly reflecting the impact of the US export controls implemented in December 2024, partially offset by the incremental demand for WFE possibly brought by the significantly increased AI capital expenditure by some of China's hyperscale cloud providers.

With clearer visibility of several capital expenditure projects in China, UBS predicted China's WFE companies to further speed up their market share growth in leading wafer plants this year due to tightened export controls. Although uncertainty persists regarding whether export controls will escalate further, Chinese wafer plants may have already stocked up on key equipment to cope with short-term capacity expansion.

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