Key Points

• Goldman Sachs raised its global front-end wafer fabrication equipment (WFE) spending forecasts to $150 billion in 2026, $218 billion in 2027 and $281 billion in 2028.
• DRAM and advanced-node foundry demand are the primary near-term drivers, with HBM4 production expected to sustain elevated memory-equipment spending and DRAM capacity constraints potentially lasting through 2028.
• TSMC’s N2 ramp and Terafab investments add a second wave of demand, broadening semiconductor equipment growth beyond memory and creating stronger order visibility for major equipment suppliers.

Goldman Sachs has significantly increased its outlook for global semiconductor manufacturing equipment spending, pointing to stronger-than-expected demand for DRAM and advanced-node foundry services as the primary catalysts for a broader expansion in wafer fabrication investment.

In a global semiconductor capital equipment report released August 23, Goldman Sachs raised its WFE spending forecasts for 2026, 2027 and 2028 to $150 billion, $218 billion and $281 billion, respectively. The revisions represent increases of 6%, 17% and 35% from the firm’s previous estimates.

The revised forecasts imply year-over-year growth of 36% in 2026, 45% in 2027 and 29% in 2028, compared with previous expectations of 28%, 32% and 12%.

The change reflects a shift in the industry’s demand structure. Rather than relying primarily on one semiconductor segment, Goldman Sachs sees simultaneous expansion across DRAM, advanced foundry, NAND and logic-related manufacturing.

DRAM Becomes the Largest Source of Upward Revisions

DRAM received the largest increase in Goldman Sachs’ equipment forecasts.

The bank raised its DRAM WFE estimates for 2026 through 2028 from $46 billion, $67 billion and $74 billion to $48 billion, $72 billion and $97 billion.

That translates into annual growth rates of approximately 50%, 50% and 35%, respectively.

Capital expenditure expectations for Samsung and SK Hynix were also increased by 22% and 19%.

The main catalyst identified by Goldman Sachs is the transition toward HBM4, which requires more sophisticated manufacturing and packaging processes than earlier generations of high-bandwidth memory.

HBM4 requires higher via density, finer micro-bump pitches and more advanced thermal-management capabilities. These requirements increase the amount of etching, deposition and inspection equipment needed for a given level of wafer capacity.

Goldman Sachs therefore expects equipment intensity to remain elevated even as DRAM manufacturers continue expanding capacity.

More importantly, the bank expects DRAM capacity constraints to persist through 2028, potentially giving equipment manufacturers unusually long order visibility.

HBM4 Strengthens the Semiconductor Capital Spending Cycle

The HBM market has become an increasingly important part of the semiconductor investment cycle because of its role in AI computing infrastructure.

The transition to HBM4 adds manufacturing complexity, increasing the equipment requirements associated with memory production.

For semiconductor equipment companies, this matters because capacity expansion is not simply a matter of adding more wafer starts. New generations of memory require increasingly sophisticated process technology, creating additional equipment spending per unit of capacity.

That dynamic helps explain why Goldman Sachs has raised its DRAM equipment outlook even while already expecting substantial capital investment from memory manufacturers.

Foundry Spending Receives a Major Upgrade

Contract manufacturing is another major source of the revised outlook.

Goldman Sachs increased its WFE forecast for the contract manufacturing segment from $52 billion, $68 billion and $78 billion for 2026, 2027 and 2028 to $58 billion, $84 billion and $109 billion.

The resulting annual growth rates are approximately 45%, 45% and 30%.

TSMC is a central factor behind the revision.

Goldman Sachs increased its TSMC capital expenditure forecast by approximately $8 billion, primarily because of stronger demand for the company’s N2 process.

N2 represents TSMC’s first mass-production node based on a gate-all-around transistor architecture. Its greater process complexity increases demand for advanced manufacturing equipment, including EUV lithography, atomic layer deposition and selective etching.

Goldman Sachs expects N2 production volumes to continue increasing over the coming quarters, creating additional procurement opportunities across the semiconductor equipment supply chain.

Advanced Nodes Require More Equipment

The transition from one semiconductor process node to another is increasingly equipment-intensive.

As manufacturing technology becomes more complex, chipmakers require additional process steps and more sophisticated tools to produce each unit of capacity.

Goldman Sachs expects N2 to require approximately 20% more EUV layers than N3, while the higher exposure requirements further increase lithography intensity.

That creates a particularly favorable environment for advanced lithography equipment suppliers as leading-edge semiconductor production expands.

Terafab Adds a New Source of Equipment Demand

Another significant change in the Goldman Sachs forecast is the inclusion of Terafab spending.

The bank has incorporated approximately $16.8 billion of initial equipment commitments from SpaceX and Tesla into its WFE forecast under the logic/other category.

The initial Terafab equipment program is expected to cover major manufacturing categories, including lithography, etching, deposition and inspection.

Because those requirements overlap substantially with conventional logic foundry equipment demand, Terafab represents an additional source of spending for the semiconductor equipment industry.

Goldman Sachs believes Terafab is still in its early stages, meaning subsequent phases could provide further upside to the logic/other equipment outlook.

Logic and Other Equipment Spending Also Rises

Goldman Sachs raised its logic and other WFE forecasts for 2026 through 2028 from $32 billion, $35 billion and $37 billion to $34 billion, $47 billion and $53 billion.

The corresponding annual growth rates increase to approximately 11%, 40% and 12%.

The revision reflects stronger-than-expected demand from Intel, recovery in mature-node manufacturing and improved conditions in analog markets.

Terafab accounts for a significant portion of the expected growth in this category, according to the source material.

NAND Remains Constrained Despite Lower 2027 Forecast

The NAND outlook is somewhat different.

Goldman Sachs maintained its 2026, 2027 and 2028 WFE forecasts at $11 billion, $15 billion and $22 billion, respectively, although its 2027 estimate was reduced from $17 billion.

The adjustment primarily reflects changes in the timing of capital expenditure by certain manufacturers.

Near-term NAND equipment spending is expected to focus primarily on technology upgrades rather than aggressive capacity expansion, while supply constraints are expected to continue through 2027.

This means NAND remains part of the broader semiconductor equipment recovery, but it is not currently the primary source of the forecast upgrade.

Equipment Suppliers Stand to Benefit

The upward revisions have also strengthened Goldman Sachs’ view of semiconductor equipment companies.

The bank’s preferred names include Applied Materials, Lam Research, ASML, Tokyo Electron, ASMI, BESI, Lasertec and Ebara.

Applied Materials and Lam Research are positioned to benefit from increased DRAM capacity investment, particularly in etching and deposition.

HBM4’s requirements for high-precision TSV etching and copper-fill deposition increase the importance of those technologies.

ASML is positioned around the continued expansion of advanced-node lithography, particularly through EUV and DUV systems required for leading-edge production.

LaserTec also benefits from increasing inspection requirements across both DRAM and advanced logic manufacturing.

Meanwhile, BESI and Ebara could benefit from the increasing complexity of advanced packaging associated with HBM production.

A More Diversified Semiconductor Cycle

The broader significance of Goldman Sachs’ revision is that semiconductor equipment growth is becoming less dependent on a single recovery cycle.

DRAM demand is accelerating because of HBM4 and AI-related memory requirements. Advanced foundry investment is increasing as N2 production expands. NAND remains constrained while manufacturers upgrade technology, and logic spending is receiving an additional boost from Terafab and other investments.

This creates a more diversified demand environment for equipment manufacturers.

The combination of multiple investment drivers also potentially improves order visibility because weakness in one semiconductor category can be partially offset by strength elsewhere.

Closing Insights

Goldman Sachs’ revised WFE forecasts point to a semiconductor capital-spending cycle that could remain unusually strong through 2028.

The immediate catalyst is DRAM and HBM4, where manufacturing complexity and capacity constraints are driving higher equipment intensity. The second major driver is advanced foundry investment, particularly TSMC’s N2 process.

Beyond those established areas, Terafab introduces another potentially significant source of logic-equipment demand, while mature-node and analog recovery provides additional support.

The result is a semiconductor equipment market increasingly supported by multiple structural investment themes rather than a single cyclical recovery. For equipment manufacturers, that combination could translate into longer order visibility and stronger operating leverage if the spending forecasts materialize.

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