Global sales of semiconductor manufacturing tools are set to climb through at least 2027 due to increasing demand for chips by the AI sector as well as continued growth in China that strives for semiconductor self sufficiency, reports SEMI, an organization that unites different companies across the semiconductor supply chain.
Sales of semiconductor production tools — including wafer fab equipment (WFE), test tools, and assembly and packaging (A&P) equipment — are set to reach around $133 billion in 2025, up 13.7% year-on-year, followed by $145 billion in 2026 and $156 billion in 2027, if SEMI's estimates are correct. SEMI projects both front-end and back-end segments to expand continuously through the forecast period. It is necessary to note that the organization has revised its forecast from mid-2025 due to stronger than expected sales of AI accelerators and infrastructure required to support them.
Front-end equipment
Within the whole market of semiconductor manufacturing tools, front-end wafer fab equipment remains the dominant category. After reaching $104 billion in 2024, WFE revenue is forecast to increase 11% to $115.7 billion in 2025, up from SEMI's mid-year outlook. The adjustment reflects heavier spending on DRAM, and high-bandwidth memory (HBM) in particular, as well as continued fab build-outs in China. Growth is expected to persist in the coming years as WFE sales projected to rise 9% YoY in 2026 and 7.3% YoY in 2027, when they are expected to reach $135.2 billion.
On the application side, foundry and logic equipment spending is projected to grow 9.8% year-on-year to $66.6 billion in 2025 as companies like Intel, Samsung, and TSMC continue to spend on leading-edge production capacities. SEMI expects this segment to expand further in 2026 and 2027, reaching $75.2 billion as TSMC, Samsung, and others ramp production of AI accelerators, HPC processors, and premium mobile SoCs.
Although DRAM and NAND makers express reluctance to invest significantly in expansion of their production capacity, SEMI predicts that memory will experience a particularly strong rebound in the coming years. DRAM equipment sales are projected to rise 15.4% to $22.5 billion in 2025, then continue expanding in 2026 and 2027 as suppliers scale HBM production and transition to more advanced process technologies. Spending on 3D NAND manufacturing tools is expected to surge 45.4% to $14 billion in 2025, followed by growth to $15.7 billion in 2026 and $16.9 billion in 2027, driven by higher 3D NAND layer counts and capacity additions.
Back-end equipment
Back-end tools, which began recovering in 2024, is expected to maintain strong momentum.
Chip test equipment revenue is forecast to jump 48.1% to $11.2 billion in 2025, followed by additional growth of 12% in 2026 and 7.1% in 2027. Assembly and packaging (A&P) tools are projected to grow 19.6% to $6.4 billion in 2025 and continue to expand through 2027. SEMI attributes this trend to increasingly complex device architectures, the rapid uptake of advanced and heterogeneous packaging, and higher performance requirements for AI processors and HBM stacks.
China to remain the biggest market
From a geographic standpoint, China, Taiwan, and South Korea are expected to remain the largest markets for semiconductor equipment throughout the forecast period.
Even as growth moderates after 2026, China is projected to retain its leading position as domestic manufacturers invest in mature and select advanced nodes. Taiwan's elevated spending in 2025 reflects large-scale capacity additions for leading-edge AI and HPC logic chips (and probably memory), while South Korea's increases are expected to be driven by major investments in advanced memory technologies, including HBM.
Other regions are also expected to see increased spending in 2026 and 2027, though SEMI attributes this to government incentives, onshoring, and specialty capacity expansions.
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