Bernstein raises two-year global semiconductor equipment growth forecast to 75%, driven by DRAM and advanced logic
Bernstein sharply raised its global wafer fabrication equipment (WFE) forecasts on Aug.
Bernstein sharply raised its global wafer fabrication equipment (WFE) forecasts on Aug. 11. It now expects WFE to reach $148 billion in 2026, up 26.3%; $204 billion in 2027, up 32.6%; and $259 billion in 2028, up 27%. That represents cumulative growth of 75% over two years.
The main drivers are accelerating memory expansion and a surge in advanced logic in China. DRAM WFE is expected to grow 53% in 2027, while NAND WFE is forecast to rise 58%.
The revisions are significantly above the market's previous expectations.
Excluding China, WFE is expected to grow 37% in 2027 and 27% in 2028. China's WFE market is projected to reach $101 billion in 2028, while Chinese domestic equipment makers are expected to grow 41% year over year in 2026 to $16 billion.
Bernstein's rationale is that DRAM and NAND are sharply expanding capital spending as HBM and advanced nodes drive demand. Huawei's Tau Scaling Law is described as improving performance through advanced packaging that stacks multiple dies, thereby consuming more wafers. Tight supply in mature logic is also encouraging foundries to resume aggressive capacity expansion.
The report says the market has not fully priced in the outlook and that a gap between expectations and potential results remains, particularly after a recent pullback in Chinese semiconductor equipment stocks. Bernstein says the pullback has created an attractive entry point.
In summary, Bernstein has raised its forecast for global WFE growth over two years to 75%, with memory and advanced logic in China serving as the two main drivers. The report characterizes the semiconductor equipment sector as being at the beginning of a supercycle and identifies AMAT, ASML, Kokusai and leading Chinese equipment makers as the strongest names.
The report is favorable toward the global semiconductor equipment supply chain. These views are Bernstein's, not independent factual assessments.
Potential catalysts cited by Bernstein are AMAT's earnings report, scheduled for Thursday of that week; upward revisions to Chinese equipment makers' orders, with channel checks indicating levels above company guidance; a rebound in China's equipment sector in the second half of 2026; execution of DRAM and NAND expansion plans; continued Chinese DUV orders for ASML; and the timing of KLAC's long-lead-time orders converting into revenue.
The main drivers are accelerating memory expansion and a surge in advanced logic in China. DRAM WFE is expected to grow 53% in 2027, while NAND WFE is forecast to rise 58%.
The revisions are significantly above the market's previous expectations.
Excluding China, WFE is expected to grow 37% in 2027 and 27% in 2028. China's WFE market is projected to reach $101 billion in 2028, while Chinese domestic equipment makers are expected to grow 41% year over year in 2026 to $16 billion.
Bernstein's rationale is that DRAM and NAND are sharply expanding capital spending as HBM and advanced nodes drive demand. Huawei's Tau Scaling Law is described as improving performance through advanced packaging that stacks multiple dies, thereby consuming more wafers. Tight supply in mature logic is also encouraging foundries to resume aggressive capacity expansion.
The report says the market has not fully priced in the outlook and that a gap between expectations and potential results remains, particularly after a recent pullback in Chinese semiconductor equipment stocks. Bernstein says the pullback has created an attractive entry point.
In summary, Bernstein has raised its forecast for global WFE growth over two years to 75%, with memory and advanced logic in China serving as the two main drivers. The report characterizes the semiconductor equipment sector as being at the beginning of a supercycle and identifies AMAT, ASML, Kokusai and leading Chinese equipment makers as the strongest names.
The report is favorable toward the global semiconductor equipment supply chain. These views are Bernstein's, not independent factual assessments.
Potential catalysts cited by Bernstein are AMAT's earnings report, scheduled for Thursday of that week; upward revisions to Chinese equipment makers' orders, with channel checks indicating levels above company guidance; a rebound in China's equipment sector in the second half of 2026; execution of DRAM and NAND expansion plans; continued Chinese DUV orders for ASML; and the timing of KLAC's long-lead-time orders converting into revenue.