Founder Securities has released a research report stating that global semiconductor equipment demand continues to grow strongly, driven by accelerating AI infrastructure investment, increasing device architecture complexity, and high-performance demand for HBM and other applications.
According to a SEMI report, global semiconductor equipment sales are projected to reach a new high of $165.9 billion in 2026, representing a year-on-year growth of 23.2%, up from the 15.1% growth rate in 2025. By 2028, the equipment market size is expected to reach $229.5 billion, achieving five consecutive years of growth. On the supply side, domestic manufacturers have made breakthroughs in improving localization rates in areas such as etching, deposition, cleaning, and CMP, but localization rates remain relatively low in advanced process nodes and segments including coating and development, metrology and inspection, and ion implantation.
Key views from Founder Securities are as follows:
Since the COVID-19 pandemic in 2020, wafer fabs continuously expanded capacity in 2021-2022 to support growing terminal demand for high-performance computing and automotive applications. In addition, various regions continued to invest to avoid semiconductor supply chain restrictions similar to those experienced during the pandemic. In 2023, due to weak downstream demand and memory inventory adjustments, South Korea's capital expenditure declined significantly. Entering 2024, benefiting from advanced logic, mature logic, advanced packaging, high-bandwidth memory (HBM) capacity expansion, and significant growth in Chinese investment, equipment sales recovered strongly. Starting from 2025, driven by increasing device architecture complexity, accelerated penetration of advanced/heterogeneous packaging, and stringent performance requirements of AI and HBM, equipment demand continues to maintain strong growth, although some consumer, automotive, and industrial demand remains weak.
According to a SEMI report, global semiconductor equipment sales are expected to reach a new high of $165.9 billion in 2026, representing a year-on-year growth of 23.2%, up from the 15.1% growth rate in 2025. By 2028, the equipment market size is expected to reach $229.5 billion, achieving five consecutive years of growth. This optimistic growth forecast mainly stems from the acceleration of AI infrastructure investment, as well as increased investment in advanced logic, memory, and back-end technologies required by higher computing density, high-bandwidth memory (HBM) investment, and more complex device architectures.
From a segment perspective:
In recent years, benefiting from capacity construction at frontier nodes for AI accelerators, high-performance computing, and high-end mobile processors, front-end equipment sales for Foundry and Logic applications have grown steadily. SEMI expects equipment sales in this segment to grow by 18.9%, 18.1%, and 13.6% in 2026-2028, respectively. In the memory-related equipment segment, DRAM is driven by HBM demand, advanced DRAM node migration, and NAND technology transformation, while 3D NAND layer migration and higher-density architecture investment also drive NAND equipment investment growth.
From the demand side:
On one hand, under the AI development trend, both memory and logic are driving equipment demand growth. On the other hand, from the perspective of technology iteration, advanced processes have greatly increased the complexity and number of process steps in wafer manufacturing. To ensure capacity, more equipment is needed on production lines. In the FLASH memory chip segment, as mainstream manufacturing processes have evolved from 2D NAND to 3D NAND structures, the increased structural complexity has led to gradually increasing demand for thin film deposition equipment.
From the supply side:
Domestic semiconductor equipment manufacturers, after years of product refinement, have achieved breakthroughs in improving localization rates in areas such as etching, deposition, cleaning, and CMP. Some domestic manufacturers have even achieved a leap from domestic substitution to exports, and several leading enterprises are developing toward platformization, such as Naura Technology Group, Advanced Micro-Fabrication Equipment Inc. China, and Hangzhou Changchuan Technology. However, in advanced process nodes and segments including coating and development, metrology and inspection, and ion implantation, localization rates remain relatively low.
Overall, the demand side features a broad equipment market space, strong downstream demand, and technological iteration, while the supply side features domestic substitution and exports, making semiconductor equipment a leading track even among many prosperous mechanical equipment sectors, with strong sustainability.
Investment recommendations:
Attention is suggested for front-end equipment platform companies Naura Technology Group and Advanced Micro-Fabrication Equipment Inc. China; low localization rate segments such as ion implantation, including Hwatsing Technology; coating and development segment including Kingsemi; metrology equipment sector including Skyverse Technology, Jingce Electronic, and Zhuhai Tianzhun Technology; thin film deposition segment including Piotech, Jiangsu Leadmicro Nano Technology, and ACM Research Shanghai. For back-end packaging and testing equipment, attention is suggested for Hangzhou Changchuan Technology, Beijing Huafeng Test & Control Technology, and Shenzhen Jingzhida Technology. For equipment components, key attention is suggested for Shenyang Fortune Precision Equipment, Shanghai Zhengfan Technology, Yingjie Electric, Qiangyi Shares, Zhenbao Technology, Gaokai Technology, Chaochun Yingcai, Torrance, Guidian Shares, Kema Technology, and Ningbo XINLEI Materials Technology.
Risk warnings: Technology progress falling short of expectations, downstream demand falling short of expectations, macroeconomic fluctuations, and intensifying industry competition risks.