Memory and Advanced-Node Foundry Strength Drive Goldman Sachs to Sharply Raise Its 2026-2028 Global WFE Forecasts

Overview

Based on positive semiconductor capital expenditure signals emerging during the second-quarter earnings season, the report broadly raises its 2026-2028 wafer fabrication equipment spending forecasts. Goldman Sachs believes the core near-term growth drivers are DRAM and advanced-node foundry, while medium-term momentum will broaden to NAND, logic, and other applications, underpinning its continued bullish view on global semiconductor capital equipment stocks.

Core views

Goldman Sachs raised its global wafer fabrication equipment spending (WFE) forecasts for 2026, 2027, and 2028 from $141bn, $186bn, and $208bn to $150bn, $218bn, and $281bn, respectively. The new forecasts imply year-over-year growth of 36%, 45%, and 29%, versus prior forecasts of 28%, 32%, and 12%. The revisions are based on positive capital expenditure data disclosed during the second-quarter earnings season, significant upward revisions to investment plans by major semiconductor equipment suppliers, and a more constructive industry outlook. The report believes that process-node migrations, HBM4 adoption, and new capacity will jointly support this equipment demand cycle. Separately, the title of Exhibit 1 states that the 2026 WFE growth forecast is 45%, versus 32% previously; these figures appear in the original report alongside the 36% and 28% figures for 2026 cited in the main text. Foundry is one of the main sources of the near-term WFE upgrade. Goldman Sachs raised its 2026-2028 foundry WFE forecasts from $52bn, $68bn, and $78bn to $58bn, $84bn, and $109bn, respectively, implying year-over-year growth of 45%, 45%, and 30%, versus 30%, 30%, and 16% previously. Since its last update, Goldman Sachs has increased its TSMC capital expenditure forecast by $8bn in each year from 2026 through 2028, reflecting higher-than-previously-assumed investment intensity for the N2 process and sustained customer demand. As N2 enters the volume ramp-up phase over the next several quarters, the report expects advanced-node logic chips to continue driving foundry equipment demand. DRAM is another core driver. Goldman Sachs raised its 2026-2028 DRAM WFE forecasts from $46bn, $67bn, and $74bn to $48bn, $72bn, and $97bn, respectively, implying year-over-year growth of 50%, 50%, and 35%, versus 45%, 45%, and 10% previously. Over the same period, the report's average 2026-2028 DRAM capital expenditure forecasts were raised by 22% for Samsung Electronics and 19% for SK Hynix. Despite the higher spending, Goldman Sachs still expects industry capacity to remain constrained through 2028, indicating that equipment investment driven by HBM demand and process migrations will not be sufficient to rapidly eliminate supply constraints. The annual trajectory for NAND was not upgraded across the board. The 2026-2028 NAND WFE forecasts were revised to $11bn, $15bn, and $22bn, respectively, implying growth of 35%, 35%, and 50%; the prior forecasts were $11bn, $17bn, and $20bn, implying growth of 40%, 50%, and 15%. This means that the 2027 forecast was lowered while the 2028 forecast was raised. Goldman Sachs expects near-term incremental spending to be directed primarily toward equipment upgrades rather than large-scale capacity additions. As a result, NAND supply is expected to remain tight through 2027, with stronger investment growth becoming more evident later in the period. Forecasts for logic and other applications were also raised significantly. Goldman Sachs increased its 2026-2028 WFE forecasts for these applications from $32bn, $35bn, and $37bn to $34bn, $47bn, and $53bn, respectively, implying year-over-year growth of 11%, 40%, and 12%, versus 5%, 9%, and 6% previously. The upgrade is mainly attributable to better-than-expected Intel demand and a recovery in mature-node and analog chip markets. SpaceX and Tesla have committed approximately $16.8bn to the initial phase of Terafab, and the project's equipment spending contribution has been incorporated into the logic and other applications forecasts. Taken together, these changes reinforce Goldman Sachs' bullish view on semiconductor capital equipment stocks. Globally, it continues to favor Buy-rated Applied Materials, Lam Research, ASML, Tokyo Electron, ASMI, BESI, Lasertec, and Ebara. The report's positive view relates to the industry equipment spending cycle and these preferred equipment companies' exposure to it; it does not provide new company target prices or indicate any explicit rating actions.

Analysis framework

The report first revises its total global WFE forecast based on capital expenditure information from the second-quarter earnings season and equipment suppliers' outlooks, and then breaks down the incremental sources by foundry, DRAM, NAND, and logic and other applications. Each segment forecast incorporates capital expenditure revisions by major wafer manufacturers, process-node migrations, HBM4 adoption, capacity constraints, market recovery, and Terafab investment, ultimately forming the basis for its directional view on global semiconductor equipment stocks.

Methodology notes

• Industry/Sector Analysis FrameworkSupply-demand framework

  Equipment Investment and Wafer Capacity Supply-Demand Analysis

  The report treats wafer-fab capital expenditure, process upgrades, and new capacity as drivers of equipment demand, and DRAM and NAND capacity constraints as indicators of supply conditions, using these factors to assess the WFE growth trajectory across different applications.

• Industry/Sector Analysis Framework

  Application-Based WFE Forecast Revisions

  Goldman Sachs first forecasts total global WFE and then divides it into Foundry, DRAM, NAND, and Logic/Other, comparing new and previous forecasts and year-over-year growth rates to identify which applications and years contribute to the aggregate upgrade.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Applied Materials Inc.

  Listed among Goldman Sachs' globally preferred Buy-rated semiconductor capital equipment stocks.

  Strengths

  Exposed to the upgraded global WFE cycle highlighted in the report.

  Comparison

  Included in the preferred list alongside Lam Research, ASML, Tokyo Electron, ASMI, BESI, Lasertec, and Ebara.

• Lam Research Corp.

  Listed among Goldman Sachs' globally preferred Buy-rated semiconductor capital equipment stocks.

  Strengths

  Exposed to the upgraded global WFE cycle highlighted in the report.

  Comparison

  Included in the preferred list alongside Applied Materials, ASML, Tokyo Electron, ASMI, BESI, Lasertec, and Ebara.

• ASML Holding

  Listed among Goldman Sachs' globally preferred Buy-rated semiconductor capital equipment stocks.

  Strengths

  Exposed to the advanced-node foundry expansion and node migrations emphasized in the report.

  Comparison

  Included in the preferred list alongside Applied Materials, Lam Research, Tokyo Electron, ASMI, BESI, Lasertec, and Ebara.

• Tokyo Electron

  Listed among Goldman Sachs' globally preferred Buy-rated semiconductor capital equipment stocks.

  Strengths

  Exposed to the upgraded global WFE cycle highlighted in the report.

  Comparison

  Included in the preferred list alongside Applied Materials, Lam Research, ASML, ASMI, BESI, Lasertec, and Ebara.

• ASM International

  Listed among Goldman Sachs' globally preferred Buy-rated semiconductor capital equipment stocks.

  Strengths

  Exposed to the upgraded global WFE cycle highlighted in the report.

  Comparison

  Included in the preferred list alongside Applied Materials, Lam Research, ASML, Tokyo Electron, BESI, Lasertec, and Ebara.

• BE Semiconductor Industries

  Listed among Goldman Sachs' globally preferred Buy-rated semiconductor capital equipment stocks.

  Strengths

  Exposed to the upgraded global semiconductor equipment investment cycle highlighted in the report.

  Comparison

  Included in the preferred list alongside Applied Materials, Lam Research, ASML, Tokyo Electron, ASMI, Lasertec, and Ebara.

• Lasertec

  Listed among Goldman Sachs' globally preferred Buy-rated semiconductor capital equipment stocks.

  Strengths

  Exposed to the advanced-node investment and node migrations emphasized in the report.

  Comparison

  Included in the preferred list alongside Applied Materials, Lam Research, ASML, Tokyo Electron, ASMI, BESI, and Ebara.

• Ebara

  Listed among Goldman Sachs' globally preferred Buy-rated semiconductor capital equipment stocks.

  Strengths

  Exposed to the upgraded global WFE cycle highlighted in the report.

  Comparison

  Included in the preferred list alongside Applied Materials, Lam Research, ASML, Tokyo Electron, ASMI, BESI, and Lasertec.

Key data

• Global WFE Forecast2026 $150bn; 2027 $218bn; 2028 $281bnCorresponding to year-over-year growth of 36%, 45%, and 29%; previous forecasts were $141bn, $186bn, and $208bn, corresponding to growth of 28%, 32%, and 12%.
• 2026 WFE Growth Rate Shown in Exhibit 145%The exhibit title states that the previous forecast was 32%; the aggregate forecast section in the main text separately gives 36% for 2026, versus 28% previously.
• Foundry WFE Forecast2026 $58bn; 2027 $84bn; 2028 $109bnCorresponding to growth of 45%, 45%, and 30%; previous forecasts were $52bn, $68bn, and $78bn.
• TSMC Capital Expenditure Forecast RevisionRaised by $8bn per year from 2026 through 2028Reflects higher N2 investment intensity and sustained customer demand.
• DRAM WFE Forecast2026 $48bn; 2027 $72bn; 2028 $97bnCorresponding to growth of 50%, 50%, and 35%; previous forecasts were $46bn, $67bn, and $74bn.
• DRAM Capital Expenditure Forecast RevisionSamsung Electronics +22%; SK Hynix +19%Both figures represent increases in average 2026-2028 capital expenditure forecasts relative to the previous update.
• NAND WFE Forecast2026 $11bn; 2027 $15bn; 2028 $22bnCorresponding to growth of 35%, 35%, and 50%; previous forecasts were $11bn, $17bn, and $20bn.
• Logic/Other WFE Forecast2026 $34bn; 2027 $47bn; 2028 $53bnCorresponding to growth of 11%, 40%, and 12%; previous forecasts were $32bn, $35bn, and $37bn.
• Initial Terafab Investment CommitmentApproximately $16.8bnCommitted by SpaceX and Tesla, with the related contribution already incorporated into the Logic/Other forecast.
• Duration of DRAM Capacity ConstraintsThrough 2028Even with higher DRAM investment, Goldman Sachs still expects industry capacity to remain constrained.
• Duration of Tight NAND SupplyThrough 2027Near-term incremental investment is expected to focus primarily on equipment upgrades.

Impact & implications

The report believes the breadth and duration of global WFE growth are stronger than previously expected: near-term growth will be led by DRAM, HBM-related investment, and N2 advanced-node foundry, while medium-term growth will receive additional support from NAND, mature nodes, a recovery in the analog market, and Terafab construction. This higher equipment spending trajectory is the main basis for Goldman Sachs' continued bullish view on global semiconductor capital equipment stocks.

What to watch

• The pace of the N2 process ramp-up over the next several quarters and its equipment investment intensity.
• The implementation of Samsung Electronics' and SK Hynix's upgraded DRAM capital expenditure plans, and whether capacity constraints persist through 2028.
• The boost to equipment demand from the HBM4 transition and other process-node migrations.
• Whether near-term NAND investment remains focused on upgrades and whether supply can ease after 2027.
• The sustainability of improving Intel demand and the recovery in mature-node and analog chip markets.
• Execution progress on SpaceX's and Tesla's approximately $16.8bn investment in the initial phase of Terafab.