As the global semiconductor industry emerges from the inventory cycle, 2025 has truly become the "first year of recovery", with differentiated growth trends in various sub-sectors. Technological upgrades and demand-driven forces jointly drive the upward shift of the industry's profit center.
Overall recovery trend: Both scale and efficiency have risen
Global semiconductor sales surpassed the $200 billion mark for the first time in the third quarter of 2025, reaching $216.3 billion, with a quarter-on-quarter growth of 14.5%. Institutions predict that the full-year revenue will reach the $800 billion mark. Chinese A-share semiconductor companies have performed particularly well. In the first three quarters, the industry's net profit attributable to shareholders reached 39.8 billion yuan, surging by 53% year-on-year. Over 60% of the companies achieved profit growth, and 32 companies saw their net profits double, with both profitability and operational efficiency improving simultaneously. It is worth noting that the average gross profit margin of the industry has improved for three consecutive quarters. The gross profit margins of companies such as Xindong Lianke and Zhenlai Technology have exceeded 80%, highlighting the effectiveness of their high-end transformation.
Highlights of the sub-sector: Leading in packaging and testing as well as analog chips
The packaging and testing sector has become a "pioneer" of recovery. Its net profit attributable to shareholders in the third quarter increased by 40% year-on-year. Tongfu Microelectronics saw its profit grow by 95% year-on-year thanks to the increase in the proportion of mid-to-high-end products. Liyang Chip achieved a turnaround from loss to profit in a single quarter. Driven by the demand in automotive electronics, AI and other fields, analog chips have continued to grow at a high rate. Zhenlai Technology has benefited from the explosive growth of its satellite business, with its net profit increasing by 3.37 times year-on-year. It is expected that the proportion of satellite business revenue for the whole year will exceed 50%. Optical communication and discrete devices have taken advantage of the expansion of data centers. The CW silicon light source products of Yuanjie Technology have seen a significant increase in sales volume, driving the company to turn losses into profits. The revenue of Juguang Technology's laser optical components business has increased by 37% year-on-year.
Equipment and materials: The core battlefield for domestic substitution
The profit scale of the semiconductor equipment industry has exceeded 10 billion yuan for the first time. Northern Huachuang contributed nearly half of the profit, but Toprunning Technology's contract debt reached 4.894 billion yuan, rarely surpassing the leading company, reflecting the changes in the industry's competitive landscape. Under the wave of expansion of memory chip production, equipment and materials have become key links for domestic substitution. The equipment (61%) and material (23%) enterprises tracked by the Sci-Tech Innovation Semiconductor ETF are benefiting from the equipment update demands brought about by high-end products such as HBM. At present, the domestic production rate of semiconductor materials is still at a low level. Breakthroughs in fields such as ceramic matrix composites and high-end photoresists will directly determine the pace of domestic substitution.
