Goldman Sachs has raised its outlook for the semiconductor equipment cycle as Nvidia earnings approach and volatility across the AI supply chain picks up. The bank said AI demand is extending the current wafer fab equipment spending cycle, with global WFE spending expected to keep expanding from 2026 through 2028. Goldman projects global wafer fab equipment spending will reach $150 billion in 2026, rise to $218 billion in 2027, and increase again to $281 billion in 2028, representing year-over-year growth of 36%, 45%, and 29%, respectively. The bank said the main drivers are capacity expansion in DRAM, HBM, and advanced-node foundry production. Its report also said DRAM supply tightness could last through 2028, keeping capital expenditure by memory manufacturers at elevated levels.

Goldman Sachs said in its fourth annual report in the “Chip Act” series, released on Aug. 24, that China’s semiconductor IC self-sufficiency rate by unit volume had reached 70% as of June 2026, up from 38% in January 2010. The bank said the gap in value-based self-sufficiency remains large, with lithography equipment still the main bottleneck. Against that backdrop, Goldman raised its forecast for China’s semiconductor capital expenditure in 2030 to $82 billion, a 79% increase from its previous estimate, citing stronger demand tied to higher self-sufficiency, generative AI and customer localization strategies. The report also initiated coverage on Chinese DRAM maker CXMT with a Buy rating and a target price of 129 yuan. Goldman’s base-case estimate puts China’s AI chip total addressable market at $678 billion by 2030, while it sees the country’s DRAM market reaching $257 billion by 2028. The bank also expects domestic equipment vendors to increase their share of China’s WFE market, even as overseas suppliers remain important in advanced-node manufacturing.

Goldman Sachs said in an Aug. 23 research note that it has lifted its forecasts for wafer front-end equipment, or WFE, for 2026 through 2028 to $150 billion, $218 billion and $281 billion, respectively. The new figures are 6%, 17% and 35% above its previous estimates. The bank now sees year-over-year growth for those three years at 36%, 45% and 29%, compared with earlier projections of 28%, 32% and 12%. According to the note, DRAM and advanced-process foundry spending are the main near-term drivers behind the revision. In DRAM, Goldman Sachs raised its capital expenditure forecasts for Samsung and SK Hynix by 22% and 19%. It said HBM4 mass production is driving demand for tools such as etch and deposition equipment. On the foundry side, the bank increased its annual capital spending estimate for TSMC by $8 billion and said the N2 process has entered the mass-production ramp stage. Goldman Sachs added that NAND and logic/other, including Terafab, are expected to contribute in the medium term. It also said roughly $16.8 billion in initial-stage Terafab equipment spending committed by SpaceX and Tesla has been incorporated into its WFE forecast.

Bernstein has raised its global wafer fab equipment, or WFE, spending forecasts for 2026 through 2028 and says the current upcycle in chip equipment spending still has room to run. The firm now expects WFE to reach $148 billion in 2026, $204 billion in 2027, and $259 billion in 2028, up from prior estimates of $141 billion, $175 billion, and $198 billion. That implies cumulative growth of 75% over two years. The upgrade spans most applications and regions, but Bernstein said the larger contribution comes from memory outside China and from foundry and logic spending in China. DRAM and NAND are expected to post the fastest growth, outpacing logic and foundry. For 2027, Bernstein forecasts DRAM WFE at $69 billion, NAND at $20 billion, and logic/foundry at $104 billion, each above its earlier projections. The report also points to stronger-than-expected resilience in China. Bernstein forecasts China WFE demand at $57 billion in 2026, $57.3 billion in 2027, and $101 billion in 2028, with a sharp step-up tied to broad capacity expansion across memory, advanced logic, and mature logic. It also said recent pullbacks in semiconductor equipment stocks have created more attractive entry points, while warning that the views, ratings, and price targets cited are those of Bernstein analysts and do not constitute investment advice.

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