Semiconductor Equipment Seen as Top Winner of AI Boom as UBS Sees $250 Billion Market by 2028

Big Tech’s all-out push to raise cash is set to fuel a boom in AI infrastructure industries ranging from semiconductors to power. Global investment banks say wafer fab equipment, or WFE, stands to be the biggest beneficiary.

Global Investment Banks Turn Rosy on Outlook

UBS Sees $250 Billion Market by 2028

MarketWatch reported on June 10 that UBS analyst Timothy Arcuri wrote in a June 9 report that Micron Technology, Samsung Electronics and SK Hynix are beginning to bring new fabs online. Foundries are also moving to secure new clean-room capacity.

As chipmakers step up capital spending, the related equipment industry is starting to benefit in earnest. WFE covers a broad range of semiconductor manufacturing equipment, including clean-room construction as well as tools used for lithography, deposition, etching and cleaning.

UBS said the WFE industry may be entering a megacycle that could lift revenue to $250 billion by 2028. The bank expects WFE revenue to reach $147 billion this year, up 27% from a year earlier. It also raised its forecast for memory WFE revenue next year by $10.5 billion.

Morgan Stanley also raised its WFE market outlook last month, saying the boom in the semiconductor equipment cycle could last longer. It projected the global WFE market at $149 billion this year, $191 billion next year and $215 billion in 2028. The bank expects NAND flash WFE revenue next year to rise 52% from this year.

Citigroup forecast the global WFE market at $190 billion next year. It said that if investment tied to the massive terafab semiconductor plant championed by Tesla Chief Executive Officer Elon Musk materializes, it could generate an additional $30 billion to $70 billion of semiconductor demand for WFE in 2027 and 2028. Mizuho also forecast the WFE market at $190 billion next year, citing increased investment in high-bandwidth memory, or HBM, and DRAM by Samsung Electronics and Micron.

Kim Ju-wan, Hankyung.com reporter kjwan@hankyung.com