Bernstein has raised its forecasts for global wafer fab equipment spending and said the current upswing in semiconductor equipment outlays looks sustainable, with the recent pullback in equipment stocks creating more attractive entry points.
The firm now sees global WFE spending at $148 billion in 2026, up from $141 billion in its previous forecast. It lifted its 2027 estimate to $204 billion from $175 billion, and its 2028 estimate to $259 billion from $198 billion. On that basis, WFE would grow 75% over two years.
WFE refers to the front-end tools used in chipmaking, including lithography, etch, deposition, and other core equipment used in wafer processing. In the report, logic chips refer to compute chips such as CPUs, GPUs, and ASICs, along with the foundry capacity that supports them.
Upgrades span regions and applications, with memory and logic leading the increase
Bernstein said the upward revisions cover nearly all application areas and geographies. Still, the larger contribution comes from memory outside China and from foundry and logic spending within China.
Among the end markets, DRAM and NAND are expected to post the strongest gains, followed by logic and foundry. Bernstein said that pattern supports its view that the current equipment spending cycle has more staying power.
DRAM is the biggest driver of the cycle
Bernstein described memory as the core engine of the current upcycle. It forecasts DRAM WFE growth of 53% in 2027 and 37% in 2028. NAND is expected to grow 58% and 42% over the same two years.
The higher DRAM capital spending forecast reflects a combined push from manufacturers outside China and DRAM makers in China. For NAND, the firm tied the increase to technology upgrades and capacity expansion.
Logic and foundry are expected to grow more slowly, at 20% in 2027 and 19% in 2028, mainly on investment in advanced process technologies. Bernstein said Intel IDM spending was revised up slightly, while the China portion stayed stable.
For 2027, Bernstein now expects DRAM WFE to reach $69 billion, up from a prior $57 billion forecast. NAND is projected at $20 billion, above the earlier $18 billion, while logic/foundry is seen at $104 billion, compared with the prior $89 billion. The report noted that DRAM and NAND are both expected to grow faster than logic and foundry, something it said has not been common in past cycles.
Most of the incremental upside comes from outside China
By region, Bernstein said the largest increase comes from markets outside China. Of the additional $22.8 billion added to the 2027 forecast, DRAM accounts for $10.7 billion and logic/foundry for $9.8 billion. Of the extra $36.8 billion added to the 2028 forecast, DRAM accounts for $18 billion and logic/foundry for $15 billion.
The 2026 revision was smaller at $7 billion. Foundry contributed $3.4 billion of that increase, DRAM added $2.6 billion, and the rest came from other subsegments.
The report also compared its projections with guidance from major equipment suppliers. Tokyo Electron expects WFE at about $120 billion in 2026, above $150 billion in 2027, and above $190 billion in 2028. Lam Research expects WFE to be close to $110 billion in 2026 and in the low $150 billion range in 2027. KLA expects WFE in the low $120 billion range in 2026, above $150 billion in 2027, and above $190 billion in 2028.
Bernstein said there is still a notable gap between those figures and its own forecast, arguing that current company guidance remains conservative. As order visibility improves, the firm expects later earnings seasons to bring gradual upward revisions.
Bernstein sees stronger resilience in China WFE demand
For China, Bernstein forecasts WFE demand of $57 billion in 2026, $57.3 billion in 2027, and $101 billion in 2028. It expects 2026 and 2027 to stay nearly flat because shortages of DUV lithography tools are weighing on imports. In 2028, the forecast jumps to $101 billion as all subsegments move into expansion.
The 2026 China forecast was cut by $1.1 billion from the prior estimate, mainly because DUV shortages are weakening imports. Even so, Bernstein expects domestic equipment vendors to deliver 41% year-over-year growth, with revenue reaching $16 billion.
For 2027 and 2028, the China WFE forecasts were raised by $6.3 billion and $24 billion. Bernstein said every major subsegment in China is expanding, including memory, advanced logic, and mature logic.
Memory remains the strongest area, with year-over-year growth of 88%, 81%, and 62% from 2026 through 2028. The report linked the breakout in advanced logic to Huawei’s advanced packaging approach, which stacks multiple chips to raise performance and consumes more wafers in the process.
In mature logic, Bernstein said several factors are tightening supply and pushing foundries back toward aggressive capacity expansion: domestic NAND makers outsourcing CMOS production to foundries, new demand driven by AI, and an upswing in industrial and automotive markets.
Bernstein expects China WFE imports to recover in the second half of 2026, with full-year imports reaching a record $41 billion. It also said global equipment suppliers’ revenue from China should be flat year over year in 2026, an improvement from its earlier expectation of a decline, with room for further upward revisions in the coming quarters.
ASML, Applied Materials, and China toolmakers in focus
In European semiconductor equipment, Bernstein said ASML is its top pick. The firm expects ASML’s revenue to post a 34% compound annual growth rate from 2025 through 2028, supported by higher DRAM and advanced logic capital spending and by rising lithography intensity.
It expects both EUV and DUV to grow strongly. EUV shipments are projected to rise from 48 units in 2025 to 118 units in 2028, close to doubling over the period. Bernstein also said that while ASML’s China revenue mix is set to fall to 20% under company guidance, from 33% in 2025 and 41% in 2024, there is still meaningful upside in continued Chinese demand for DUV systems.
Among U.S. equipment names, Bernstein raised its price target on Applied Materials to $675 from $525, a 29% increase. Lam Research was lifted to $385 from $360, and KLA to $250 from $225. All three kept outperform ratings.
Within Bernstein’s U.S. equipment ranking, Applied Materials comes first because of its exposure to advanced logic, DRAM, and packaging, along with what the firm sees as a relatively cheaper valuation. Lam Research follows on stronger execution and NAND upgrade exposure, though with a richer valuation. KLA is growing a bit more slowly this year because of longer delivery cycles, but the report said it has the largest exposure to advanced logic and greater upside after 2027.
For China equipment stocks, Bernstein ranked NAURA ahead of Advanced Micro-Fabrication Equipment, followed by Piotech. All three kept outperform ratings. Bernstein said NAURA stands out for its broader product portfolio, spanning deposition, dry etch, thermal processing, and cleaning, and for its roughly 40% exposure to advanced logic, which leaves it well positioned if advanced logic capacity expansion accelerates.
Report view and disclaimer
Bernstein said global semiconductor equipment is in one of its strongest upcycles since 2008. In its view, the market is systematically underestimating the intensity of capital spending in DRAM and advanced logic, misreading the resilience of demand in China, and relying on guidance from major equipment suppliers that remains too conservative. The projected 75% two-year increase in WFE, the report said, reflects a structural expansion across the semiconductor manufacturing chain.
This article is a整理与解读 of a third-party brokerage report by Bernstein dated Aug. 11, 2026, combined with public market information, according to the source material. The cited ratings, price targets, earnings forecasts, and related judgments are the views of the brokerage analysts and represent only their institution’s position. They do not represent the view of Chaoxiang Research and do not constitute investment advice.
The source also stated that markets carry risk, decisions should be made independently, and the article should not be used as a basis for buying or selling any security.