The semiconductor industry is entering an era of unprecedented capital investment, driven largely by surging artificial intelligence demand, advanced logic and memory expansion, and accelerating adoption of heterogeneous integration. According to the most recent forecast from industry group SEMI, global semiconductor manufacturing equipment sales are on track for record performance, with total OEM equipment revenue rising sharply in 2025 and projected to grow even further through 2027.
In its Year‑End Total Semiconductor Equipment Forecast, SEMI reported that equipment sales — encompassing everything from wafer fab tools to test and packaging systems — are expected to reach a record $133 billion in 2025, roughly a 13.7 percent year‑on‑year increase over 2024. Growth is not expected to plateau; instead, SEMI projects equipment revenue will climb to approximately $145 billion in 2026 and further to around $156 billion by 2027.
This projected expansion is notable for both its magnitude and its underlying drivers. Front‑end wafer fab equipment — which includes photolithography, etch, deposition, and cleaning systems used in logic and memory manufacturing — remains a key growth engine. SEMI’s forecast shows wafer fab equipment (WFE) growing robustly in 2025, with further moderate gains through 2027 as foundries and integrated device manufacturers add capacity for advanced node logic, DRAM, and high‑bandwidth memory (HBM) to meet data‑center and AI accelerator demand.
Meanwhile, back‑end semiconductor equipment — encompassing test, assembly, and packaging tools — is also showing sustained momentum. Sales of test equipment are expected to surge by nearly 48 percent to about $11.2 billion in 2025, reflecting heavier investment in quality, yield, and performance verification for complex chips. At the same time, assembly and packaging equipment is forecast to rise nearly 20 percent, with continued growth through 2027 as advanced packaging technologies such as 2.5D/3D integration and wafer‑level fan‑out packaging expand in adoption.
This broad‑based equipment investment trend demonstrates how the semiconductor industry is responding to long‑term shifts in compute and connectivity requirements. The rapid deployment of AI infrastructure, 5G/6G networks, edge computing nodes, and automotive electronics all feed into a need for next‑generation chips — and these chips require both more advanced fabrication tools and more sophisticated test and packaging systems. For equipment vendors, this translates to a multi‑year growth runway that extends well beyond cyclical end‑market fluctuations.
For suppliers, designers, and buyers of microelectronics components, the strength in capital equipment spending signals several important implications. First, stronger equipment demand presages higher capacity in semiconductor production, which can eventually ease supply constraints for microcomponents. Second, the mix of equipment growth — including back‑end packaging tools — suggests that advanced packaging and heterogeneous integration will continue to play an increasingly central role in the evolution of chip performance and form factor. Third, robust investment nudges the entire value chain toward higher technology content, with suppliers needing to align product roadmaps, qualification cycles, and supply strategies with more advanced applications and tighter performance requirements.
In essence, the current equipment spending cycle is not just a short‑term response to AI hype; it reflects a structural re‑architecture of the semiconductor industry — one where modular, high‑performance, and tightly integrated microelectronics systems form the backbone of future digital infrastructure.