Global semiconductor equipment spending surges as AI drives chip demand

Yesterday 17:44

By: Azzat Manal

Global semiconductor equipment spending surges as AI drives chip demand

The global semiconductor manufacturing equipment market is entering a powerful investment cycle, driven largely by the rapid expansion of artificial intelligence, advanced computing and high-performance memory. Goldman Sachs has significantly raised its forecasts for wafer fabrication equipment (WFE) spending, pointing to a much stronger investment outlook through 2028.

The bank now expects global WFE spending to reach approximately $150 billion in 2026, $218 billion in 2027 and $281 billion in 2028. These figures represent increases of 6%, 17% and 35%, respectively, compared with its previous projections.

The revised outlook reflects a broader acceleration across the semiconductor industry. Spending is expected to rise by around 36% in 2026, 45% in 2027 and 29% in 2028, as manufacturers expand production capacity to meet growing demand for advanced chips and memory.

Artificial intelligence is emerging as one of the main forces behind this investment boom. AI data centers require increasingly powerful processors and high-bandwidth memory, encouraging manufacturers to invest heavily in new production technologies and facilities.

The DRAM segment is expected to be one of the strongest contributors. Goldman Sachs forecasts WFE spending on DRAM at around $48 billion in 2026, $72 billion in 2027 and $97 billion in 2028. The development of HBM4 memory is particularly important, as this technology is designed to support the demanding computing requirements of AI systems.

The transition to HBM4 also requires more sophisticated manufacturing and packaging processes. Higher levels of integration, greater interconnection density and increasingly precise production techniques are creating additional demand for specialized semiconductor equipment.

Advanced foundries are another major source of growth. Goldman Sachs estimates that WFE spending in this segment could reach $58 billion in 2026, $84 billion in 2027 and $109 billion in 2028. The expansion of advanced manufacturing capacity is being supported by strong demand for next-generation processors.

TSMC remains a central player in this investment cycle. The Taiwanese manufacturer is preparing to expand production using its N2 process, a major technological step that introduces a gate-all-around transistor architecture for mass production. Such advanced manufacturing requires sophisticated equipment, including extreme ultraviolet lithography, atomic layer deposition and selective etching technologies.

The investment landscape is also becoming more diversified as companies outside the traditional semiconductor manufacturing sector seek greater control over chip production. Projects involving major technology and industrial players could add another layer of demand for semiconductor manufacturing equipment.

The NAND market is expected to grow more moderately. Goldman Sachs maintains forecasts of approximately $11 billion in WFE spending in 2026, $15 billion in 2027 and $22 billion in 2028, although the timing of certain investments could shift depending on market conditions and manufacturers' capacity plans.

The expected increase in capital expenditure is likely to benefit major semiconductor equipment suppliers. Companies such as Applied Materials, Lam Research, ASML and Tokyo Electron are positioned to benefit from rising demand for deposition, etching, lithography and other critical manufacturing technologies.

The investment cycle also reflects a structural change in the semiconductor industry. Rather than relying on a single recovery in memory demand, the market is increasingly being supported by several simultaneous trends, including AI infrastructure, advanced logic, high-bandwidth memory, new manufacturing nodes and expanding foundry capacity.

For equipment manufacturers, this diversification could provide greater visibility over future orders and reduce dependence on any single segment of the semiconductor market. At the same time, manufacturers will face the challenge of managing enormous capital requirements, technological complexity and rapidly evolving demand.

If the projected investments materialize, the semiconductor equipment industry could experience one of its strongest periods of expansion in years. Artificial intelligence is therefore not only transforming the market for chips themselves but is also reshaping the machinery, factories and technologies required to produce them.