A Review of the 2025 Annual Reports of the Photomask Industry: Accelerated Domestic Substitution, Technological Breakthroughs and Performance Differentiation Coexist.
In 2025, China’s photomask industry reached a critical inflection point, driven by global semiconductor supply chain restructuring and rapid upgrades in flat panel display technology. As domestic substitution accelerates from low-cost replacements to high-end technological breakthroughs, the annual reports of four major A-share listed companies reveal a stark performance divide. Luwei Optoelectronics and Qingyi Optoelectronics emerged as clear leaders, delivering robust double-digit growth in both revenue and net profit. Luwei’s success was fueled by economies of scale and the verified supply of IC photomasks at 90nm and above, with 40nm and 28nm nodes successfully validated. Qingyi benefited from expanded high-end AMOLED/LTPS mask production at its Hefei subsidiary, posting strong revenue gains and significant growth in equity and total assets. Conversely, Longtu Photomask and Guanshi Technology faced short-term financial pressure. Longtu’s profit dropped nearly 39% due to pricing competition in mature nodes and heavy depreciation from its new Zhuhai facility, while Guanshi reported a net loss of 70 million yuan amid strategic transformation investments, despite making notable strides in 55nm and 40nm process verification.
This performance divergence reflects differing strategic priorities, particularly in R&D intensity and capacity deployment. Longtu Photomask prioritized long-term technological barriers, allocating 11.10% of revenue to R&D highest among the four with a lean team focused on 90nm mass production and 65nm validation. Qingyi Optoelectronics led in absolute R&D spending (640 million yuan) and workforce size, concentrating on advanced OLED and 130nm–40nm processes, while also advancing its Foshan production facility toward 2026 mass production. Luwei and Guanshi maintained lower R&D intensity (around 3–4%) but directed capital toward scaling high-generation display capacity and preparing sub-28nm semiconductor equipment.
Beyond financials and capacity, the 2025 reports signal a fundamental shift in China’s photomask domestic substitution strategy, moving from basic supply chain security to genuine technological leadership and high-end market integration. Domestically produced masks are now widely adopted in consumer electronics and intelligent driving systems, with companies actively localizing core materials, integrating AI for imaging optimization, and strengthening customer relationships across leading chip and display manufacturers. Financial indicators reflect this transition, as firms balance revenue growth with strategic credit extension and capital preservation. Looking ahead, the industry stands at a pivotal crossroads: while Luwei and Qingyi enjoy near-term profitability and capacity maturity, Longtu and Guanshi are betting heavily on advanced process breakthroughs that could redefine competitive rankings. With AMOLED manufacturing shifting to China and domestic fabs rapidly expanding, the successful ramp-up of new production lines and the customer adoption of 28nm-and-below masks will be decisive in 2026, cementing the photomask sector’s growing strategic importance as a foundational enabler of China’s semiconductor and display industries.
This performance divergence reflects differing strategic priorities, particularly in R&D intensity and capacity deployment. Longtu Photomask prioritized long-term technological barriers, allocating 11.10% of revenue to R&D highest among the four with a lean team focused on 90nm mass production and 65nm validation. Qingyi Optoelectronics led in absolute R&D spending (640 million yuan) and workforce size, concentrating on advanced OLED and 130nm–40nm processes, while also advancing its Foshan production facility toward 2026 mass production. Luwei and Guanshi maintained lower R&D intensity (around 3–4%) but directed capital toward scaling high-generation display capacity and preparing sub-28nm semiconductor equipment.
Beyond financials and capacity, the 2025 reports signal a fundamental shift in China’s photomask domestic substitution strategy, moving from basic supply chain security to genuine technological leadership and high-end market integration. Domestically produced masks are now widely adopted in consumer electronics and intelligent driving systems, with companies actively localizing core materials, integrating AI for imaging optimization, and strengthening customer relationships across leading chip and display manufacturers. Financial indicators reflect this transition, as firms balance revenue growth with strategic credit extension and capital preservation. Looking ahead, the industry stands at a pivotal crossroads: while Luwei and Qingyi enjoy near-term profitability and capacity maturity, Longtu and Guanshi are betting heavily on advanced process breakthroughs that could redefine competitive rankings. With AMOLED manufacturing shifting to China and domestic fabs rapidly expanding, the successful ramp-up of new production lines and the customer adoption of 28nm-and-below masks will be decisive in 2026, cementing the photomask sector’s growing strategic importance as a foundational enabler of China’s semiconductor and display industries.
