Goldman Sachs upgraded its wafer fabrication equipment (WFE) spending projections through 2028, citing robust capital expenditure trends in the semiconductor sector following second-quarter earnings reports.
The bank now expects global WFE spending to reach $150 billion in 2026, up 36% year-over-year, followed by $218 billion in 2027 (45% YoY growth) and $281 billion in 2028 (29% YoY growth). Foundry segment WFE spending is projected at $58 billion in 2026, rising to $84 billion in 2027 and $109 billion in 2028. DRAM equipment spending is forecast at $48 billion in 2026, $72 billion in 2027 and $97 billion in 2028, with the DRAM sector expected to remain capacity-constrained through 2028 despite elevated investment levels.
Short-term growth is driven by DRAM and leading-edge foundries, while NAND and Logic segments are expected to contribute in the medium term.
Among top-rated equipment manufacturers, Applied Materials reported a 15% quarter-over-quarter revenue increase in its third fiscal quarter and guided next-quarter revenue to $10.25 billion, exceeding consensus estimates. Stifel and Cantor Fitzgerald maintained buy ratings on the stock. Lam Research posted record revenue of $6.72 billion and earnings per share of $1.82 in its fourth fiscal quarter, both surpassing analyst expectations.
ASML, another Goldman Sachs top pick, is expected to benefit from sustained demand for advanced lithography equipment amid fully booked capacity for next-generation EUV tools through the end of 2027. The company’s CFO indicated potential for further equipment price increases given the constrained supply of next-generation tools.
Tokyo Electron, ASMI, BE Semiconductor Industries (BESI) and Lasertec all received buy ratings from Goldman Sachs. Tokyo Electron reported first-quarter results with earnings per share above expectations despite revenue slightly below estimates, while Lasertec’s key performance indicators aligned with Morgan Stanley’s forecasts.
