Global sales of equipment used to manufacture semiconductor wafers are set to climb about 9% to 126 billion dollars in 2026, before rising a further 7.3% to 135 billion dollars in 2027, according to fresh forecasts from industry body SEMI. The growth is driven primarily by massive investments in logic and memory capacity to support AI accelerators, high-performance computing and premium mobile processors.
After a period of cyclical softness, this marks the continuation of a new equipment “supercycle” tied less to generic smartphone demand and more to the relentless scaling needs of AI training and inference workloads. As cloud providers and hyperscalers race to deploy ever more GPUs and specialised AI chips, foundries and IDMs are ramping advanced-node and high-bandwidth memory lines to avoid being the bottleneck in the AI value chain.
China, Taiwan and South Korea Remain the Core Markets
Most semiconductor manufacturing still happens in Asia, and SEMI expects China, Taiwan and South Korea to remain the top markets for wafer fab equipment through at least 2027, with China leading overall investment. Taiwan, home to TSMC and a dense ecosystem of foundries and OSATs, is expanding leading-edge logic capacity, particularly at 3 nm and below, to serve AI and HPC customers.
South Korea, anchored by Samsung and SK Hynix, is tilting its capex mix towards advanced memory—especially HBM and next-generation DRAM critical to AI clusters. While North America, Europe, Japan and Southeast Asia are also forecast to increase equipment spending, their growth is more heavily shaped by government incentives, onshoring/“friendshoring” policies and targeted specialty fabs for automotive, power and analog.
Big Five Toolmakers Tighten Their Grip
On the supplier side, the semiconductor equipment market remains highly concentrated. ASML, the Netherlands-based lithography giant, accounts for roughly a quarter of total equipment sales, thanks to its monopoly on leading-edge EUV tools and strong DUV portfolio. Applied Materials, Lam Research and KLA in the US, along with Tokyo Electron in Japan, round out the top tier, covering deposition, etch, process control and a broad range of fab subsystems.
For these vendors, the AI boom is translating into multi-year visibility on orders, particularly for wafer fab equipment. At the same time, they face pressure to innovate around power efficiency, yield management and process control as fabs push towards 2 nm gate-all-around nodes and increasingly complex 3D memory architectures. For enterprise and policy leaders, SEMI’s forecast reinforces a simple reality: AI’s next decade will be shaped as much by capex into fabs and tools as by breakthroughs in model architectures.
