Focusing on Core Industry Chain Segments: Investment Value and Industry Trend Analysis of Semiconductor Equipment and Materials ETF

Keywords: Semiconductor Equipment, Semiconductor Materials, ETF, CSI Index, Industry Chain, Investment Value

Introduction

Amid increasingly fierce global technological competition, the semiconductor industry has become a key pillar measuring a country's technological strength and economic development. With the booming development of emerging fields such as AI, 5G, IoT, and new energy vehicles, semiconductor demand continues to rise, and the upstream equipment and materials segments are the "throat" determining industrial self-reliance. In recent years, breakthroughs in domestic semiconductor equipment and materials have accelerated domestic substitution, significantly increasing investment attention. Against this backdrop, the E Fund Semiconductor Equipment ETF (Code: 159558, Feeder Fund A/C: 021893/021894), tracking the CSI Semiconductor Materials and Equipment Theme Index, provides investors with an index tool for precise positioning in core industry chain segments. This article explores in depth from dimensions such as industry logic, index features, product advantages, and investment outlook.

I. The "Gatekeeper" of the Semiconductor Supply Chain: Strategic Value of Equipment and Materials

The semiconductor supply chain can be roughly divided into design, manufacturing, packaging & testing, and upstream equipment and materials, downstream applications. Equipment and materials are the foundation, directly determining chip manufacturing precision, yield, and efficiency. From etching, lithography, thin-film deposition for wafer manufacturing, to dicing saws, testers for packaging, and various high-purity chemicals, photoresists, specialty gases, each segment is indispensable. However, the global semiconductor equipment market has long been dominated by giants like Applied Materials, Lam Research, and Tokyo Electron, while material markets are led by companies like Shin-Etsu Chemical and Dow. Mainland China has low self-sufficiency in equipment and materials, especially for high-end equipment and key materials needed for advanced processes, posing significant bottleneck risks.

This supply-demand imbalance has created huge space for domestic substitution. National policies continue to support the semiconductor industry, with Phase I and II of the Big Fund focusing on equipment and materials, and local governments actively deploying industrial parks. According to industry research, by 2025, Mainland China's semiconductor equipment market had surpassed RMB 300 billion, but the domestic substitution rate remains below 20%; the materials sector also heavily relies on imports. As local companies accelerate technological breakthroughs and customer validation, the next five years may see explosive growth. For investors, focusing on this core segment captures the core logic of industrial upgrading and self-reliance.

II. CSI Semiconductor Materials and Equipment Theme Index: Accurately Depicting the Upstream Track

The CSI Semiconductor Materials and Equipment Theme Index (hereafter "Index") is a key benchmark for measuring the overall performance of A-share listed companies in semiconductor equipment and materials. It selects samples from the Shanghai and Shenzhen markets involving semiconductor materials and equipment, reflecting the overall operation of the upstream supply chain. The constituent stocks cover major equipment sub-segments such as etching, thin-film deposition, cleaning, and ion implantation, as well as key materials like silicon wafers, photoresists, electronic specialty gases, and wet chemicals. Top ten heavyweight stocks are mostly leaders in their respective sub-tracks, combining growth potential and technical barriers.

Compared to broad-based semiconductor indices (e.g., China Semiconductor Chip Index), this Index focuses more on equipment and materials, avoiding large weight interference from design and manufacturing, thus showing a higher "tool attribute." Equipment and materials segments have stronger capital expenditure attributes and directly benefit from downstream wafer fab expansion and production line construction, making their performance elasticity often greater than that of design segments. Moreover, the domestic substitution logic for equipment and materials is purer—under foreign sanctions, domestic fabs prefer domestic equipment and materials for validation and mass production, providing a clear growth path for related companies.

The above diagram intuitively shows the core position of equipment and materials in the supply chain and their close connection to manufacturing. It is evident that equipment and materials run through the entire process of wafer manufacturing and packaging & testing, forming the key foundation for industrial self-reliance.

III. Semiconductor Equipment ETF E Fund: An Excellent Choice for Tool-Based Investment

Tracking the above Index, the E Fund Semiconductor Equipment ETF (Code: 159558) was officially listed in 2025, one of the few ETF products on the market focusing on semiconductor equipment and materials themes. As a leading domestic public fund company, E Fund has extensive experience in index products and mature operational systems. The ETF uses full replication to track the Index, minimizing tracking error, providing investors with a convenient, transparent, low-cost index investment solution.

Specifically, the product has the following core advantages: First, precise theme positioning, covering the most critical equipment and materials segments of the semiconductor supply chain with one click, avoiding stock selection difficulties; second, low fees, with total management and custody fees only 0.2% per year, far lower than actively managed funds, making long-term investment more cost-effective; third, good liquidity, with sizable average daily turnover since listing, supporting real-time trading during market hours for flexible allocation; fourth, multi-channel on and off exchange, besides direct trading of ETF shares on the secondary market, investors can subscribe via feeder funds (A/C: 021893/021894) through banks and third-party platforms, convenient for off-exchange investors.

Regarding product scale and holder structure, as of mid-2026, the ETF's scale had exceeded RMB 3 billion, with institutional ownership proportion increasing, reflecting professional investors' recognition of its investment value. For investors hoping to share the dividends of semiconductor supply chain upgrades, this ETF provides an efficient and safe allocation tool.

IV. Industry Trends and Investment Outlook: Domestic Substitution Enters Deep Waters

Looking ahead, the semiconductor equipment and materials industry faces multiple favorable factors. First, domestic substitution policies continue to intensify. Phase III of the National Semiconductor Industry Big Fund has clearly designated equipment and materials as key investment directions, with policy support expected to increase. Second, downstream wafer fab expansion brings deterministic demand. Leading domestic foundries and memory chip manufacturers are actively expanding capacity, with dozens of production lines expected to come online from 2026 to 2028, marking a peak in equipment procurement. Industry estimates suggest that every 10,000 pieces of 12-inch wafer capacity correspond to about $1 billion in equipment investment, with domestic equipment penetration expected to rise from below 20% to over 30% by 2028. Third, AI computing power explosion drives high-end equipment demand. The surge in training and inference needs for advanced process chips (e.g., 3nm, 5nm) expands the high-end equipment market for EUV lithography, high-precision etching, etc., with domestic equipment companies accelerating catch-up.

However, investors must also recognize related risks. The semiconductor industry is cyclical, with global macroeconomic fluctuations, weak downstream consumer electronics demand, and technology iteration lag potentially affecting sector performance. Additionally, equipment and materials companies often face long customer validation cycles, and earnings releases may lag behind stock price performance. Therefore, this ETF is more suitable for investors with a long-term horizon willing to bear certain volatility, participating through dollar-cost averaging or buying on dips, rather than short-term speculation.

Conclusion

Semiconductor equipment and materials are the segments with the highest technical barriers and greatest domestic substitution potential in the semiconductor supply chain, key to technological self-reliance. The CSI Semiconductor Materials and Equipment Theme Index accurately captures investment opportunities in this track, while the E Fund Semiconductor Equipment ETF (159558) and feeder funds (021893/021894) provide convenient, low-cost entry methods for investors. In the current window of accelerating domestic substitution and rising industry sentiment, allocating such tool-based products may fully benefit from the historic opportunity of China's semiconductor industry rise. Of course, investors should reasonably plan positions based on their risk preferences and investment goals, avoiding over-concentration. Only by rationally deploying with insight into industry logic can one harvest both alpha and beta returns in long-term investment.