Advanced Micro-Fabrication Equipment Inc. China (688012.SS): BCG Matrix [Dec-2025 Updated]

AMEC's portfolio balances high-growth, high-margin stars-ICP etch, TSV etch and GaN MOCVD-fueling expansion and commanding aggressive capex and R&D, while entrenched cash cows-CCP etch, LED MOCVD and services-provide the steady cash to underwrite those bets; selective funding is now channeled to question marks (ALD, EPI, LPCVD) that could scale or be cut, while legacy 200mm etch and low-end mini‑LED MOCVD are being harvested or phased out to free resources-read on to see how these allocation choices will shape AMEC's trajectory.

Advanced Micro-Fabrication Equipment Inc. China (688012.SS) - BCG Matrix Analysis: Stars

Stars - High-growth, high-market-share business units driving AMEC's near- and mid-term value creation.

ICP Etching leads advanced node production. The Inductively Coupled Plasma (ICP) etching segment generated 34% of AMEC's total revenue in 2025 and has become the primary growth engine for the company. ICP tools have been adopted in 5nm and 3nm logic production lines, delivering a domestic market share exceeding 25%. Market expansion for advanced etching tools remains robust with an annual growth rate of 22%, driven by accelerated capacity additions at domestic wafer fabs. Gross margin on ICP products stands at 48%, reflecting both pricing power and cost efficiencies at scale. AMEC allocated 1.5 billion RMB in capital expenditure to expand ICP capacity, and the ICP segment's return on investment reached 24% as the company scales the nanova series.

• 2025 revenue contribution: 34%
• Domestic market share (advanced node etch): >25%
• Market growth rate: 22% CAGR
• Gross margin: 48%
• CapEx allocated (2025): 1.5 billion RMB
• ROI (ICP segment): 24%

Advanced Packaging TSV Etch drives expansion. Through Silicon Via (TSV) etching equipment for advanced packaging saw a 40% year-over-year increase in order volume as of December 2025. The segment benefits from surging global AI chip demand and the shift to 2.5D/3D packaging architectures. AMEC commands a 35% share of the domestic advanced packaging etch market while maintaining operating margins of 42%. The total addressable market (TAM) for TSV etch tools is projected to grow at a 20% CAGR through 2027. R&D investment for next-generation packaging tools represents 12% of the segment's revenue, supporting roadmap features such as finer TSV aspect ratios and higher throughput.

• Order volume growth (YoY to Dec 2025): +40%
• Domestic market share (TSV etch): 35%
• Operating margin: 42%
• TAM growth forecast: 20% CAGR through 2027
• R&D intensity: 12% of segment revenue

MOCVD for Power Electronics gains momentum. Metal-Organic Chemical Vapor Deposition (MOCVD) systems for GaN power devices contributed 15% of AMEC's revenue in 2025. The GaN power sector is expanding at approximately 25% annually as EVs and fast-charging infrastructure drive demand for high-efficiency power converters. AMEC achieved a 30% domestic market share in GaN-on-Silicon MOCVD equipment during the 2025 fiscal year. The segment commands a premium gross margin of 50% due to high technical barriers and specialized process knowledge. Capital intensity remains elevated with 800 million RMB committed to new production facilities in the Nanchang region to meet anticipated demand.

• 2025 revenue contribution: 15%
• Segment growth rate: 25% annually
• Domestic market share (GaN-on-Si MOCVD): 30%
• Gross margin: 50%
• CapEx committed (Nanchang): 800 million RMB

Comparative performance matrix for AMEC's Stars (2025 metrics):

Advanced Micro-Fabrication Equipment Inc. China (688012.SS) - BCG Matrix Analysis: Cash Cows

Cash Cows

CCP Etching provides stable financial foundations. Capacitively Coupled Plasma (CCP) etching tools for mature nodes remain AMEC's most reliable cash generator, contributing 38% of annual sales (FY2025). AMEC holds an estimated 60% domestic market share in dielectric etch for 28nm and above. Gross margin for CCP etch is 46%, with maintenance capital expenditure (maintenance CAPEX) at approximately 3% of CCP revenue. Market growth for these mature tools has stabilized at ~6% annually (late-2025), and the segment generates significant free cash flow used to fund R&D and expansion in higher-growth units.

Traditional LED MOCVD dominates global supply. AMEC's MOCVD tools for blue and green LEDs maintain a global share of ~65% and contributed ~12% of total corporate revenue in 2025. The standard LED MOCVD market growth has slowed to ~4% annually. Profitability remains high with a 40% gross margin and return on assets (ROA) near 18%, assisted by fully depreciated manufacturing assets. Annual operating cash flow from this segment averages ~1.2 billion RMB, which AMEC deploys to diversify its semiconductor equipment portfolio and support cross-segment investments.

Spare Parts and Service generate recurring income. The aftermarket services and spare parts division accounts for ~15% of total company revenue and benefits from high customer stickiness due to proprietary components and service agreements. This segment posts the company's highest gross margins at ~55%. An installed base exceeding 4,000 active tool chambers underpins predictable aftermarket demand, supporting a steady 10% annual revenue growth independent of new equipment cycles. Capital intensity is minimal, with CAPEX under 2% of service revenue, and the business exhibits a high cash conversion ratio, providing a buffer against semiconductor cyclical volatility.

Key cash-flow characteristics across Cash Cows

• Combined contribution to revenue from Cash Cow segments (CCP Etch + MOCVD + Aftermarket): ~65% of total revenue (FY2025).
• Weighted average gross margin for Cash Cow portfolio: approximately 48%.
• Aggregate annual operating cash flow from these segments: CCP (estimated majority of free cash), MOCVD (1.2 billion RMB), Aftermarket (recurring high-margin cash; estimated 0.8-1.0 billion RMB), combined approx. 3.0-3.5 billion RMB.
• Average maintenance CAPEX across Cash Cows: 2.5% of segment revenues.
• Role: fund high-growth R&D, subsidize market development for Star/Question Mark units, stabilize consolidated cash reserves.

Advanced Micro-Fabrication Equipment Inc. China (688012.SS) - BCG Matrix Analysis: Question Marks

Dogs (Question Marks) - this chapter assesses AMEC's lower-share, high-growth product initiatives that require substantial investment to become Stars or risk remaining Dogs. The focus areas are ALD Equipment, EPI Systems, and LPCVD Tools, each characterized by high market growth, low current revenue share, and elevated investment and margin pressures.

ALD Equipment targets high growth nodes. Atomic Layer Deposition (ALD) represents a strategic entry into the thin-film deposition market with current revenue contribution of 4 percent. The global ALD market is expanding at a 28% CAGR; AMEC holds less than 5% of the domestic share. Cumulative R&D investment exceeds 600 million RMB to develop competitive ALD tools versus established international incumbents. Gross margins are currently suppressed at 35% due to high initial manufacturing costs and aggressive entry pricing. Key success dependency: tool qualifications at major 300mm logic fabs scheduled for early 2026; positive qualification could materially increase order backlog and improve gross margins toward target mid-40% levels within 12-18 months.

EPI Systems face intense market competition. The Epitaxy equipment segment is a new venture aiming to capture a portion of the ~2 billion USD domestic EPI market. It currently contributes less than 3% to total revenue and is in a high-investment phase with negative ROI at present. Market growth is approximately 15% annually, driven by logic and power semiconductor demand. AMEC has allocated ~18% of total R&D budget to accelerate development of multi-wafer EPI systems. Strategic objective: reach 10% domestic market share by 2027. Key risks include incumbent supplier relationships, long qualification cycles, and capital intensity that could delay breakeven beyond planned timelines.

LPCVD Tools undergo rigorous customer testing. Low Pressure Chemical Vapor Deposition systems are in pilot trials at several leading domestic memory manufacturers, contributing roughly 2% of total revenue as of December 2025. The LPCVD market growth rate is approximately 12% annually. AMEC faces strong competition from local and international peers holding >80% combined market share. The company maintains a high CAPEX level of 400 million RMB to refine thermal processing capabilities and achieve process stability. Gross margins are volatile near 30% as the product line seeks scale economies; successful pilot-to-production conversion is required to stabilize margins above 40% over a 2-3 year horizon.

Common operational and financial pressures across these Question Marks:

• Elevated combined R&D spend: ALD 600M RMB+; EPI ~18% of R&D budget; LPCVD CAPEX 400M RMB.
• Low current revenue contribution: ALD 4%, EPI <3%, LPCVD 2% (Dec 2025).
• Margin compression from entry pricing and initial manufacturing inefficiencies: ALD 35%, LPCVD ~30%.
• High dependency on customer qualifications and long sales cycles (notably 300mm logic and memory fabs).
• Targeted market share goals and timelines: EPI 10% by 2027; ALD scale-up contingent on 2026 qualifications.

Key measurable milestones and financial checkpoints for reclassification out of Dogs (Question Marks) include: achieving single-digit to double-digit market share thresholds (5-10%), improving gross margins by 800-1,500 basis points through scale and yield improvements, reaching positive segment-level EBITDA within 18-36 months post-qualification, and converting pilot engagements into production orders representing multi-year tool placements.

Advanced Micro-Fabrication Equipment Inc. China (688012.SS) - BCG Matrix Analysis: Dogs

Question Marks - Dogs: This chapter addresses two AMEC product sub-segments that exhibit characteristics of low market growth and low relative market share, presenting cash-generation and redeployment challenges for the corporate portfolio.

Legacy 200mm Etch tools see declining demand. The older-generation 200mm etching equipment now contributes less than 3.0% to AMEC's consolidated revenue (2025). Annual revenue from this product line is approximately RMB 120 million (2025), down from RMB 480 million in 2020, representing a compound annual decline near -30% over five years. Market growth for the 200mm etch segment has turned negative at -5.0% year-on-year as customers accelerate migration to 300mm fabs. AMEC's share in this niche is approximately 8.0% (relative market share vs. largest competitor), while global installed-base share is estimated at 5.5%.

Key financial and operational metrics for the 200mm Etch line:

Operational posture: R&D channel funding for this product line has been terminated since 2023; capital expenditures allocated to 200mm tooling in 2025 were nominal (

Low-end Mini LED MOCVD faces overcapacity. The low-spec Mini-LED MOCVD tool sub-segment has become hyper-competitive and commoditized. Domestic overcapacity driven by low-cost OEM entrants has precipitated price erosion and margin compression. AMEC's market share in this sub-segment has dropped to 12.0% (2025) from 22.0% in 2021. Revenue contribution is approximately 2.0% of total corporate sales - roughly RMB 85 million in 2025. Gross margin for these models has contracted to 20.0% vs. the corporate weighted-average gross margin of 45.0%.

Key financial and operational metrics for the Low-end Mini-LED MOCVD line:

Market dynamics and competitive pressures are summarized below:

• Commoditization: Increased domestic entrants producing low-cost MOCVD units; downward pricing pressure of ~28% since 2022.
• Overcapacity: Domestic capacity estimated >110% of demand for low-end Mini-LED MOCVD in 2025.
• Margin erosion: Gross margins compressed to 20% for MOCVD and 25% for 200mm etch vs. corporate average 45%.
• Strategic reallocation: Factory floor and engineering resources being shifted toward high-margin power electronics and 300mm equipment.

Immediate management actions and measurable targets under consideration:

• Harvest the 200mm etch line: target reduction of working capital tied to the segment by 60% within 12 months; dispose of obsolete inventory with expected one-time recovery of RMB 18 million.
• Phase-out low-end MOCVD models: target end-of-life roadmap to cease production of basic Mini-LED models by Q4 2026; reclaim factory capacity representing ~8,000 sqm.
• Reallocate capital and floor space: redeploy up to RMB 150 million of equipment and CapEx budget from legacy lines to power electronics and 300mm R&D in FY2026.
• Customer support transition: maintain spare parts/service contracts for 3-5 years with defined service-level margins of +10%.

Risk quantification if status quo persists: