AI’s appetite for compute has fundamentally reshaped the semiconductor equipment landscape, with SEMI now projecting five consecutive years of expansion. The industry association’s Mid-Year Total Semiconductor Equipment Forecast puts 2026 OEM sales at 65.9B, representing a 23.2% jump over 2025, and sees the market cresting 29B by 2028.
Wafer fab equipment, the largest slice of the pie at 43.9B this year, continues to be propelled by foundry and logic builds for AI accelerators. The segment has logged a 23.1% gain over 2025’s 16.9B and is on pace to cross 00B within two years as chipmakers push toward high-volume 2nm gate-all-around production. Memory fab equipment is on an even steeper trajectory — DRAM spending is slated to surge 39% to 8.8B in 2026, propelled by HBM fabrication demands, while NAND equipment climbs 30.7% to 3.9B amid ongoing 3D NAND layer migrations.
Back-end equipment is riding the same wave but at different velocities. Test kit sales are forecast to advance 31% to 5.3B this year, reflecting the tighter validation requirements of complex AI and HBM devices. Assembly and packaging, meanwhile, is rising at a more measured 9.6% to .7B, though both segments could nearly double by 2028 as heterogeneous packaging and advanced interconnect technologies become mainstream. “AI is accelerating demand for more powerful and efficient chips, driving increased investment across the semiconductor capital equipment market,” said SEMI President and CEO Ajit Manocha.
Geographically, China is projected to retain its lead in equipment spending through the forecast window, though growth there is expected to moderate following an extraordinary multi-year investment run. Taiwan continues to benefit from leading-edge capacity expansions tied to AI and HPC workloads, while Korea’s spending profile is anchored by advanced memory, particularly HBM-related DRAM and NAND transitions.
