Global semiconductor manufacturing equipment spending is heading into a rare, almost uncomfortable kind of momentum. According to SEMI, original equipment manufacturers are on track to deliver a record $133 billion worth of tools in 2025, a 13.7% jump year-on-year that already assumes a strong 2024 base. That number doesn’t plateau or wobble afterward either. Projections push total equipment sales to $145 billion in 2026 and $156 billion in 2027, crossing the psychologically important $150 billion line for the first time. What’s driving this isn’t vague optimism or cyclical recovery talk, but a very specific, very capital-hungry force: AI, and everything upstream and downstream that AI workloads demand from silicon.
The wafer fab equipment segment tells most of the story. After hitting $104 billion last year, WFE is expected to climb to $115.7 billion in 2025, revised upward from earlier forecasts as memory and logic investments accelerated faster than expected. This isn’t just about adding more tools; it’s about adding the right ones. DRAM and high-bandwidth memory have become strategic assets rather than commodity products, and fabs are spending accordingly. China’s continued capacity build-out, spanning mature nodes and selective advanced processes, adds another layer of demand that keeps utilization rates high across equipment categories. Looking forward, WFE sales are projected to reach $135.2 billion by 2027, even as growth rates gradually normalize, suggesting a sustained expansion rather than a one-off spike.
Back-end equipment, often treated as the quieter sibling to front-end fabs, is suddenly anything but quiet. Semiconductor test equipment sales are forecast to surge more than 48% in 2025 to $11.2 billion, while assembly and packaging tools are set to rise nearly 20% to $6.4 billion. Advanced packaging, heterogeneous integration, and the sheer complexity of AI-oriented chips are rewriting what “back-end” even means. Testing is no longer a cost center you try to minimize; it’s a bottleneck you must solve. The growth continues through 2026 and 2027, albeit at a steadier pace, supported by increasingly demanding performance, yield, and reliability requirements. That said, softness in consumer electronics, automotive, and industrial chips still casts a long shadow over mainstream packaging and test segments, a reminder that not every part of the market is riding the same wave.
Application-level trends sharpen the picture further. Foundry and logic equipment spending is expected to reach $66.6 billion in 2025, driven by resilient investment in advanced nodes. As the industry moves toward high-volume manufacturing at the 2 nm gate-all-around node, capital intensity increases rather than decreases. Memory spending is even more striking. NAND equipment purchases are projected to jump over 45% in 2025 as suppliers push deeper into 3D stacking and capacity expansion, while DRAM equipment sales rise alongside the ramp-up of HBM for AI accelerators and data centers. These are not speculative bets; they are responses to real, contracted demand from hyperscalers and AI platform providers who already feel constrained by memory bandwidth rather than raw compute.
Geographically, the familiar trio of China, Taiwan, and Korea remains dominant through 2027. China is expected to retain the top spot despite moderating growth after 2026, reflecting sustained domestic investment in manufacturing resilience. Taiwan’s spending profile reflects heavy leading-edge logic builds tied to AI and high-performance computing, while Korea’s equipment outlays are anchored in advanced memory, particularly HBM. Beyond these leaders, other regions begin to show more consistent growth in 2026 and 2027, supported by government incentives, regionalization strategies, and targeted specialty fabs. It’s not a dramatic reshuffling of the map, but it is a slow broadening of where meaningful capital gets deployed.
Taken together, the forecast sketches a semiconductor equipment market that has moved beyond recovery and into structural expansion. AI isn’t just pulling demand forward; it’s reshaping how fabs prioritize nodes, how memory is valued, and how much attention back-end processes finally receive. The numbers are big, yes, but the more interesting shift is qualitative. Equipment spending is no longer chasing volume alone, but complexity, performance, and architectural ambition. That tends to last longer than a typical cycle, which might explain why these forecasts feel unusually confident—and why the industry seems willing to bet on growth all the way to 2027 and beyond.
