Chinese chipmakers made record profit in 2025, despite slipping margins — U.S shipments fall 34% as Beijing shores up local chipmaking efforts

Chinese chipmakers saw record profits in 2025 despite declining margins, with U.S. shipments to China dropping by 34%. Major Chinese wafer-fab-equipment vendors reported record revenues, but margins decreased due to increased competition. U.S. equipment makers like Applied Materials, Lam Research, and KLA still generated significant revenue from China, although export controls impacted their market share. Beijing aims to localize chipmaking efforts, with domestic equipment accounting for 35% of equipment in Chinese fabs in 2025. The U.S. government is considering stricter restrictions on chipmaking tools to China.