SemiAnalysis Projects 2028 Wafer-Fab Equipment Spending Tops $230B on Toolmaker Price Hikes and Capacity Expansions
Semiconductor equipment makers can sell through expanded capacity while raising prices, pushing 2028 wafer-fab equipment spending above $230B, according to SemiAnalysis. Wall Street models currently project the sector at $190B to $200B, a figure the analyst group argues is undercut by the industry’s increased supply and pricing leverage relative to chipmakers.
The volume and pricing shifts are already underway. Applied Materials, Lam Research, and TEL have either mapped out or plan to nearly double manufacturing output by the end of 2029, while ASML increased capacity orders after its second-quarter earnings. Like-for-like price increases are already being discussed, including a roughly 30% rise for TEL and a 10% upgrade on deep ultraviolet systems, alongside a separate 15% capex rise for TSMC tied to tool inflation. Because suppliers of semiconductor equipment lack pricing power, these revenue gains are expected to flow almost entirely to the toolmakers, lifting gross margins by one to five percentage points above historical peaks.
From the sources (5 posts)
@semianalysis_The Street models 2028 WFE around $190–200B. If the Top-5 equipment makers simply sell out planned capacity at today's prices, we think WFE lands above $230B. (1/4)🧵
@semianalysis_Capacity plans support it: AMAT says it can double output with floor space ready to go, Lam has nearly doubled manufacturing capacity in four years, TEL targets 1.8x by FY2029, and ASML turned pre-emptive on capacity after 2Q26. (2/4)
@semianalysis_Prices won't stay at today's levels. Like-for-like increases are already on the table. ASML flagged them at 2Q26 earnings, TSMC cited tool price inflation as a major driver of its +15% capex guide, Chinese customers are reportedly agreeing
@semianalysis_Price hikes flow ~100% to toolmaker gross profit. Their suppliers have no pricing power. A decade of data shows Ichor's gross margin banded at 8–17% and Ultra Clean's at 11–21%, with no breakout even in the tight 2017 and 2021–22 markets. T
@firstadopterSemiAnalysis pounding the table on semicaps.