AI boom to drive chip equipment sales to record 2027

Global sales of semiconductor manufacturing equipment are set to reach a record $133 billion in 2025 and climb to $156 billion in 2027, according to new forecasts from industry association SEMI.

The organisation expects total equipment sales by original equipment manufacturers to rise 13.7% in 2025 from the previous year. It projects further growth to $145 billion in 2026 and $156 billion in 2027.

SEMI links the three-year expansion to heavy investment in systems that run artificial intelligence workloads. The forecast highlights spending on leading-edge logic chips, memory and advanced packaging as the main drivers.

"Global semiconductor equipment sales show robust momentum, with both the front-end and back-end segments projected to see three consecutive years of growth, culminating in total sales surpassing $150 billion for the first time in 2027," said Ajit Manocha, president and CEO, SEMI. "Investments to support AI demand have been stronger than anticipated since our midyear forecast, leading us to boost the outlook for all segments."

Front-end rebound

The wafer fab equipment segment, which covers wafer processing, mask and reticle tools and fab facilities equipment, remains the largest part of the market. It reached a record $104 billion in sales last year.

SEMI expects wafer fab equipment sales to increase 11.0% to $115.7 billion in 2025. This is an upgrade from its previous mid-year prediction of $110.8 billion.

The revision follows stronger than expected investment in DRAM and high-bandwidth memory for AI computing. Continued factory build-outs in China also contribute to wafer fab demand.

The association forecasts wafer fab equipment sales will grow a further 9.0% in 2026 and 7.3% in 2027. It expects the segment to reach $135.2 billion as device makers raise spending on advanced logic and memory production.

Back-end recovery

SEMI describes the back-end segment as continuing a strong recovery that began in 2024. This segment comprises test equipment and assembly and packaging equipment.

Sales of semiconductor test tools are projected to jump 48.1% to $11.2 billion in 2025. Assembly and packaging equipment is forecast to grow 19.6% to $6.4 billion in the same year.

The association expects back-end growth to extend beyond 2025. It forecasts test equipment sales will increase 12.0% in 2026 and 7.1% in 2027. It projects assembly and packaging equipment sales will rise 9.2% in 2026 and 6.9% in 2027.

SEMI links this expansion to more complex chip architectures and wider use of advanced and heterogeneous packaging. It also cites tight performance requirements for AI and high-bandwidth memory devices.

These factors are partly offset by weak demand in some end markets. The group notes continued softness in consumer, automotive and industrial sectors, which affects mainstream test and packaging tools.

Logic and foundry demand

Wafer fab equipment for foundry and logic applications is forecast to grow 9.8% year on year to $66.6 billion in 2025. SEMI says this reflects resilient spending on advanced manufacturing nodes.

The forecast shows a 5.5% increase for this category in 2026. It then points to a 6.9% rise in 2027, when spending is expected to reach $75.2 billion.

Chipmakers are adding capacity for AI accelerators, high-performance computing and premium mobile processors. Investments are expected to focus more on leading-edge technology nodes as the industry moves towards high-volume output at the 2nm gate-all-around generation.

Memory expansion

SEMI expects memory-related capital spending to expand through 2027. It links this trend to rising demand for high-bandwidth memory in AI systems and to ongoing technology migration.

The NAND equipment market is projected to grow 45.4% to $14.0 billion in 2025. SEMI forecasts further gains of 12.7% to $15.7 billion in 2026 and 7.3% to $16.9 billion in 2027.

The association attributes this outlook to advances in 3D NAND stacking and capacity additions at both leading and mainstream layers. It expects DRAM equipment sales to rise 15.4% to $22.5 billion in 2025.

SEMI projects DRAM equipment spending will grow 15.1% in 2026 and 7.8% in 2027. It says memory suppliers are ramping high-bandwidth memory output and shifting to more advanced process nodes for AI and data centre use.

Regional picture

China, Taiwan and Korea are forecast to remain the three largest markets for semiconductor equipment through 2027. SEMI expects China to hold the top position during the period.

The group cites continued spending by Chinese chipmakers on both mature and selected advanced nodes. It expects growth in China to moderate and sales to decline gradually from 2026.

In Taiwan, SEMI links robust 2025 outlays to large-scale leading-edge capacity projects for AI and high-performance computing. It says spending in Korea is supported by major investment in advanced memory, including high-bandwidth memory.

The forecast shows higher equipment spending in all other tracked regions in 2026 and 2027. SEMI connects those gains to government incentive programmes, regionalisation strategies and targeted expansions in specialist chip production.

The projections draw on input from major equipment suppliers and data from SEMI's global market statistics and fab database. The association expects the equipment market to stay closely tied to the pace of AI-related investment over the forecast horizon.