China imported $4.76 billion of semiconductor manufacturing equipment in August, marking the first year-over-year gain after consecutive monthly declines since late 2025, according to customs data analyzed by Jefferies.
Front-end equipment imports climbed 24% and packaging equipment surged 34% in the same period. The rebound reverses a contraction that had narrowed margins on year-to-date imports, which remain down 5% at $30.69 billion through August.
Shipments from Singapore jumped 52% year-over-year, while U.S. exports to China fell 8%. Jefferies said U.S. equipment makers are routing more China-bound exports through Singapore, Malaysia and other locations, a pattern consistent with efforts to comply with export restrictions on advanced semiconductor manufacturing gear.
The U.S. has maintained controls on chip equipment sales to China since 2022, with rules tightening in October 2023 to block certain advanced nodes. American suppliers face scrutiny over transshipment schemes and must verify end-use before sending goods to intermediary nations.
China's equipment import cycle swings with fab construction and process node transitions. The August rebound coincides with renewed demand as domestic chipmakers resume capacity expansion after the contractions of 2025. Front-end equipment, which includes lithography and deposition tools, typically commands the highest value in China's import mix.
The year-to-date deficit of 5% would narrow further if monthly growth continues at August's pace. Sustained rebound depends on whether Chinese fabs maintain capital spending and whether third-country transshipment routes remain operationally stable under potential enforcement changes.
The U.S. equipment share's 8% decline marks a steeper divergence from the overall import growth than in prior cycles. If rerouting accelerates through Singapore and Malaysia without corresponding U.S. exports, the gap could widen further.
