Semiconductor Equipment: The Strongest Industry Tailwind of 2026

AI computing power is surging—and with it, the demand logic of the entire semiconductor industry is being rewritten. Along this supply chain, one “pick-and-shovel” segment is entering a phase of highly certain growth: semiconductor equipment.

01 Semiconductor equipment jumps onto the “fast lane”

In 2025, the memory market’s price upcycle ran through the entire year. Combined with the concentrated breakout of HBM (High Bandwidth Memory) and DDR5 demand—and the capacity expansion moves by global giants—the semiconductor equipment market effectively climbed onto a demand-growth “fast lane,” becoming one of the biggest beneficiaries.

Clear signals are already emerging from industry forecasts. In its recently released report Semiconductor Equipment Year-End Forecast — OEM Perspective, SEMI points to sustained momentum: global semiconductor manufacturing equipment sales by OEMs are expected to reach a record USD 133 billion in 2025, up 13.7% year over year. Over the next two years, sales are projected to continue rising, reaching USD 145 billion in 2026 and USD 156 billion in 2027. The primary driver is AI-related investment—especially in leading-edge logic, memory, and advanced packaging applications.

The growth profile is equally evident at the segment level. SEMI notes that after wafer fab equipment (WFE) posted a record USD 104 billion in 2024, WFE sales are expected to grow another 11.0% in 2025 to USD 115.7 billion. This figure is higher than SEMI’s mid-year 2025 projection of USD 110.8 billion, reflecting stronger-than-expected investment in DRAM and high-bandwidth memory (HBM) to support AI compute.

In short, memory makers’ expansion and technology upgrades have become the key engine pulling equipment demand upward.

On the domestic front, ChangXin Memory Technologies’ IPO prospectus indicates that raised funds will focus on three major directions: a “mass-production storage wafer manufacturing line technology upgrade project” (planned investment of RMB 7.5 billion), a “DRAM technology upgrade project” (planned RMB 13.0 billion), and forward-looking R&D initiatives. As these projects land, they are expected to directly lift demand across the equipment market.

International memory leaders are also moving quickly. In South Korea, Samsung Electronics and SK hynix are accelerating memory capacity expansion. Samsung has recently increased the operating efficiency of its Korea-based DRAM and NAND flash lines while concentrating resources on high-end products such as HBM. The company also restarted construction of its Pyeongtaek Line 5 plant in November, targeting mass production in 2028 to strengthen supply capability in advanced memory.

Meanwhile, SK hynix’s M15X new fab in Cheongju is entering critical preparations ahead of ramp-up, focusing on DRAM and AI-oriented memory solutions. Industry executives have indicated that SK hynix aims to complete the first wafer fab in its Yongin semiconductor cluster by 2027. The overall project scale is equivalent to six M15X-class fabs, underscoring a proactive stance toward future demand. Notably, SK hynix’s monthly DRAM wafer capacity is about 500,000 wafers; even with M15X, it reaches roughly 550,000 wafers. By comparison, Samsung’s monthly capacity is around 650,000 wafers.

SEMI data further shows that by 2026, South Korea is expected to reclaim the world’s No. 2 position in chip equipment spending, reaching about USD 29.66 billion—up 27.2% from the estimated USD 23.32 billion in 2025. This sharp increase directly reflects a strong rebound in Korean semiconductor capex driven by memory-related demand.

Looking at the phase-by-phase shift in global equipment investment patterns, Taiwan is expected to rank second in 2025 with about USD 26.16 billion, slightly ahead of South Korea. But by 2026, the order is projected to flip—South Korea returns to second place, while mainland China remains firmly in first, with estimated equipment investment of roughly USD 39.25 billion that year.

So as the memory cycle heats up, which equipment categories are being pulled most strongly?

02 These equipment categories are heating up fast

The evolution of memory chips is, at its core, a “battle for space.” From 2D planar scaling to 3D stacking, NAND flash layer counts have already pushed beyond 400 and are marching toward 1,000. DRAM is progressing toward vertical channel transistor (VCT) architectures, while HBM achieves vertical interconnect through TSV (Through-Silicon Via). This technology leap fundamentally raises the bar for semiconductor equipment.

Among the most direct beneficiaries, 3D NAND expansion and DRAM technology transitions are driving the strongest pull for etch and deposition tools. HBM capacity build-out adds another layer of demand, especially for lithography, ALD, and hybrid bonding equipment.

3D NAND / DRAM: etch and deposition demand surges

Etch tools are like the “precision carving knives” of semiconductor manufacturing. Their core job is to selectively remove unwanted material from the wafer surface according to predefined patterns.

Unlike the 2D NAND era—where etch largely played a supporting role alongside lithography—3D NAND increases integration mainly by stacking more layers rather than shrinking the linewidth of a single layer. Etching must create ultra-deep holes or trenches (with aspect ratios on the order of 40:1 to 60:1) through alternating oxide and nitride stacks. As the layer count climbs, etch technology must deliver even higher aspect ratios.

Take one 3D NAND process path as an example. Under an assumed capacity of 150k wafers per month, the proportion of etch equipment rises continuously as stacking increases. When 3D NAND scales from 32 layers to 128 layers, the etch equipment share increases from 34.9% to 48.4%. Across nodes, etch demand in the CMOS-periphery section remains relatively stable, while demand shifts sharply in the array structure—especially for channel holes, stair steps, slits, contact vias, and clear-out processes. Stair-step etch is particularly sensitive because each etch cycle forms a fixed number of steps, meaning tool count requirements grow almost proportionally with layer count. At the same time, thicker films and taller stacks lengthen etch times (sometimes doubling), reducing WPH (wafers per hour) per tool and further increasing tool demand.

SEMI forecasts that global equipment spending in the memory segment will reach USD 136 billion during 2026–2028. 3D NAND-related investment is expected to account for over 40%, and etch tools—sitting at the heart of 3D NAND—should continue to ride this expansion dividend.

DRAM has its own roadmap toward more three-dimensional structures as well, which drives both the quantity and performance requirements for etch equipment upward at an accelerating pace.

If etch is “subtraction,” thin-film deposition is “addition.” Deposition builds foundational device stacks by alternately laying down conductive and insulating films on the wafer surface. The more layers 3D NAND stacks, the more deposition steps are required—so demand for deposition tools rises in tandem. For instance, moving from 24-layer to 232-layer 3D NAND means each layer still requires deposition steps, generating additional tool demand.

Thin-film deposition typically includes CVD (Chemical Vapor Deposition) and PVD (Physical Vapor Deposition), with smaller usage of plating and evaporation. In recent years, the more advanced ALD (Atomic Layer Deposition) has grown in importance for high-precision deposition needs.

Compared with CVD and PVD, ALD offers superior step coverage for high aspect-ratio features and ultra-narrow openings, along with extremely precise film thickness control. As NAND shifts from 2D to 3D stacked structures, ALD’s share of the process flow increases. Tokyo Electron has disclosed that in flash production line capex, thin-film deposition tools accounted for about 18% in the 2D era and about 26% in the 3D era. As layer counts rise and aspect ratios grow further, ALD tool demand increases accordingly.

HBM: lithography, ALD, and bonding demand jumps

HBM stacks multiple DRAM dies vertically (commonly 4–16 layers), with each layer offering capacities around 2–24GB, and relies on TSV technology to form high-density memory arrays.

Beyond etch and deposition, HBM also places higher requirements on lithography and hybrid bonding.

Lithography upgrades are driven by two forces: DRAM process scaling and HBM’s extremely dense interconnect needs. DRAM’s sixth-generation node (D1c) has already adopted EUV lithography at scale. While Samsung, Micron, and SK hynix differ in process routes, all depend on EUV to push precision limits. Compared with ArFi, EUV’s 13.5nm wavelength reduces reliance on multi-patterning and supports the formation of VCT architectures. In HBM, rising TSV counts (HBM4 reaches 2048 connections) and micron-level routing pitch further elevate EUV’s priority.

Hybrid bonding equipment is another critical enabler in the HBM manufacturing flow. Today, HBM3/3E stacks (8–12 layers) mainly use traditional micro-bump technology, relying on TCB (Thermo-Compression Bonding) equipment—typically following two parallel paths: TC-NCF (non-conductive film) and TC-MUF (molded underfill). As stacking increases, TC-NCF’s thermal challenges become more pronounced, pushing TC-MUF toward mainstream adoption for next-generation mass production. Looking forward, with higher stacks and strict total-height constraints, hybrid bonding is increasingly viewed as a key technology for HBM’s next stage of evolution.

03 Equipment localization: the next stage of progress

As storage technologies—3D NAND, DRAM, and HBM—iterate rapidly, demand for three core tool categories will continue to expand: etch, thin-film deposition, and hybrid bonding. These tools will be critical pillars of storage industry upgrades. At the same time, supporting tools such as cleaning, ion implantation, rapid thermal processing, coating/developing tracks, packaging inspection, plating, and CMP polishing will also benefit from wafer-fab expansion and the memory demand boom—together forming a full equipment ecosystem for memory manufacturing.

In etch, key domestic players include AMEC (Advanced Micro-Fabrication Equipment), NAURA (North Huachuang), and E-Town/Yitang Semiconductor. AMEC is a leading force: its CCP tools cover most applications at 28nm and above, and it has made meaningful progress at 28nm and below. In high aspect-ratio etch for 3D NAND and front-end etch for logic chips, AMEC’s technology has reached portions of advanced nodes and has been adopted by top-tier global chipmakers.

NAURA’s CCP tools already hold a strong position in 8-inch lines for silicon etch and dielectric etch, and they have also been deployed in 12-inch lines for key non-core processes such as hardmask etch and aluminum pad etch.

Yitang Semiconductor originated from the wet equipment business unit of Applied Materials and was formed through localization-oriented acquisition and restructuring in 2015. It has since built three core equipment lines: etch, thin-film deposition, and rapid thermal processing.

In thin-film deposition, a cluster of domestic manufacturers has emerged, including NAURA, Piotech, AMEC, and Wuxi Leadmicro/Nano (Weidao). Piotech has built a broad deposition portfolio spanning PECVD, ALD, SACVD, HDPCVD, and Flowable CVD, widely applied across logic and memory manufacturing, with customers including SMIC and Huahong.

AMEC began delivering film tools to customers as early as 2023, including CVD/HAR/ALD tungsten systems and ALD systems for TiN/TiAl/TaN. Its Q3 2025 earnings release indicates that multiple LPCVD and ALD tools developed for advanced memory and logic have successfully entered the market.

NAURA remains a domestic PVD leader with high scarcity value, and it is also expanding across LPCVD, APCVD, and ALD. Weidao is an ALD-origin company and became the first domestic equipment supplier to successfully apply mass-production High-k ALD at the 28nm front-end IC manufacturing line.

ACM Research (Shanghai) started with cleaning equipment and is expanding toward a platform-style equipment company, with offerings now spanning cleaning, plating, track, CMP, and thin-film deposition.

In bonding equipment, domestic progress in hybrid bonding is increasingly visible.

In 2025, Qinghe Jingyuan released the SAB82CWW series—the world’s first independently developed C2W & W2W dual-mode hybrid bonding platform—then delivered systems and validated them in the market. The tool shows broad application potential across memory, Micro-LED displays, CMOS image sensors, and optoelectronic integration.

Leveraging its deposition technology base, Piotech developed the Dione 300 wafer-to-wafer (W2W) bonding system, enabling high-precision bonding of multi-material surfaces at room temperature and serving high-end applications such as 3D IC, advanced packaging, and CIS. The Dione 300 eX targets high-precision W2W hybrid bonding and has been shipped for customer validation. Piotech also launched the Pollux die-to-wafer (D2W) bonding surface pre-treatment line, forming a complete “pre-treatment + bonding” solution. Key metrics such as alignment accuracy and bond strength are approaching international first-tier standards. In addition, its Pleione 300 C2W hybrid bonding system targets HBM and 3D chip integration and is undergoing industrial validation.

Maiwei focuses on semiconductor cutting and 2.5D/3D advanced packaging, providing end-to-end packaging process solutions and developing tools such as wafer hybrid bonding, temporary bonding, and D2W TCB bonding.

TCB equipment has also become a core enabler for CIS and 3D IC packaging. Qinghe Jingyuan’s SAB6310 has been introduced into leading customers’ CIS production lines. Wire bonding equipment demand remains stable in power semiconductors and LED packaging, and suppliers such as Autowell, Xinyichang, and Weichen Tech have gained traction among domestic small and mid-sized OSATs with cost-effective, reliable systems. Meanwhile, temporary bonding/debonding and room-temperature bonding equipment are rising quickly. Kingsemi’s temporary bonder KS-C300-2TB and debonder KS-S300-1DBL are built for Chiplet workflows, compatible with mainstream domestic and international adhesive processes, and can support ultra-thick coatings of 60μm and above.

Driven by localization momentum and policy support, China’s equipment players are steadily breaking through long-standing international dominance—moving from technical breakthroughs to mass-production adoption across multiple segments. That said, gaps in the most advanced process nodes still objectively remain.