Memory and advanced-node foundry strength prompt Goldman Sachs to significantly raise its 2026–2028 WFE forecasts
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Memory and advanced-node foundry strength prompt Goldman Sachs to significantly raise its 2026–2028 WFE forecasts
Stronger capital expenditure signals disclosed during the second-quarter earnings season and an improved outlook from equipment suppliers prompted Goldman Sachs to raise its 2026–2028 wafer fab equipment spending forecasts to $150/$218/$281 bn. Near-term momentum comes from DRAM and advanced-node foundry, while medium-term growth broadens to NAND, logic, and other areas.
- The 2026–2028 WFE forecasts were raised from $141/$186/$208 bn to $150/$218/$281 bn.
- Foundry WFE forecasts were raised to $58/$84/$109 bn, with the N2 production ramp serving as the key near-term driver.
- DRAM WFE forecasts were raised to $48/$72/$97 bn, and the report still expects industry capacity constraints to persist through 2028.
- Near-term NAND spending is primarily directed toward technology upgrades, with tight supply expected to persist through 2027.
- Logic/Other WFE forecasts were raised to $34/$47/$53 bn, driven by improved Intel demand and recoveries in mature-node and analog markets.
- SpaceX and Tesla have committed approximately $16.8 bn to the initial phase of Terafab, which has been incorporated into the Logic/Other forecasts.
- Goldman Sachs continues to prefer eight Buy-rated global semiconductor equipment stocks.
Report interpretation
Overview
The report comprehensively updates its 2026–2028 wafer fab equipment spending forecasts based on more positive semiconductor capital expenditure signals during the second-quarter earnings season. Goldman Sachs believes DRAM and advanced-node foundry form the principal near-term growth drivers, with NAND, logic, and other applications taking over in the medium term, and therefore remains bullish on global semiconductor capital equipment stocks.
Core views
Goldman Sachs raised its global wafer fab equipment spending (WFE) forecasts for 2026/2027/2028 from $141/$186/$208 bn to $150/$218/$281 bn. The new growth rates presented in the report body are +36%/+45%/+29%, compared with the previous +28%/+32%/+12%; Exhibit 1 separately states that the 2026 WFE growth forecast is 45%, up from the previous 32%. The upgrades are based on positive capital expenditure data emerging during the second-quarter earnings season, significant increases in investment plans by major semiconductor manufacturers, and more constructive outlooks from semiconductor production equipment suppliers. Goldman Sachs believes near-term growth will be driven mainly by DRAM and advanced-node foundry, while medium-term momentum will broaden to NAND and Logic/Other, including contributions from Terafab; process-node migrations, HBM4 upgrades, and additional capacity jointly support equipment demand. For foundry, Goldman Sachs raised its 2026/2027/2028 WFE forecasts from $52/$68/$78 bn to $58/$84/$109 bn, increasing the corresponding year-over-year growth rates from +30%/+30%/+16% to +45%/+45%/+30%. Since its last update, Goldman Sachs has increased its TSMC capital expenditure forecast by $8 bn in each year from 2026 through 2028, citing higher capital intensity for the N2 process and sustained customer demand. As N2 enters volume production over the next several quarters, advanced-node logic is expected to continue driving robust foundry equipment spending. For DRAM, the 2026/2027/2028 WFE forecasts were raised from $46/$67/$74 bn to $48/$72/$97 bn, with the corresponding year-over-year growth rates revised from +45%/+45%/+10% to +50%/+50%/+35%. Updates cited in the report show that average DRAM capital expenditure forecasts for Samsung and SK Hynix over 2026–2028 were raised by 22% and 19%, respectively. Despite increased spending, Goldman Sachs still believes industry capacity constraints will persist through 2028, implying that the HBM4 transition, process upgrades, and capacity expansion requirements will continue to support equipment investment, while new investment remains insufficient to eliminate supply bottlenecks rapidly. For NAND, Goldman Sachs revised its 2026/2027/2028 WFE forecasts from $11/$17/$20 bn to $11/$15/$22 bn, with the corresponding year-over-year growth rates revised from +40%/+50%/+15% to +35%/+35%/+50%. This is not a uniform upgrade across all years: the 2026 amount is unchanged, 2027 is lowered, and 2028 is raised. The report expects most near-term incremental spending to be directed toward existing capacity and technology-node upgrades rather than large-scale capacity expansion. As a result, tight NAND supply is expected to persist through 2027, with stronger equipment spending growth shifting more toward 2028. For Logic/Other, the 2026/2027/2028 WFE forecasts were raised from $32/$35/$37 bn to $34/$47/$53 bn, increasing the corresponding year-over-year growth rates from +5%/+9%/+6% to +11%/+40%/+12%. The upgrades mainly reflect two factors: better-than-expected Intel demand, which prompted an increase in its capital expenditure forecast, and emerging recoveries in mature-node and analog chip markets, providing additional support for medium-term equipment demand. Terafab is also an important contributor to the upgrade in the Logic/Other forecasts. The report states that SpaceX and Tesla have committed approximately $16.8 bn to the initial phase of Terafab. Goldman Sachs has incorporated the related contribution into its Logic/Other WFE forecasts rather than presenting it as a separate new WFE application category. Based on these application-level forecasts, Goldman Sachs continues to be explicitly bullish on semiconductor capital equipment stocks and globally prefers Buy-rated Applied Materials, Lam Research, ASML, Tokyo Electron, ASMI, BESI, Lasertec, and Ebara. The report's industry view is based on continued equipment spending expansion over 2026–2028, but the research body does not further differentiate the extent to which each of the eight companies may benefit, nor does it provide new individual stock target prices or expected upside.
Analysis framework
Goldman Sachs first aggregates adjustments to chip manufacturers' capital expenditures and equipment suppliers' outlooks from the second-quarter earnings season, then reconstructs its 2026–2028 WFE forecasts across four application categories—foundry, DRAM, NAND, and Logic/Other—and compares each item with its previous forecast. The report then links forecast changes to specific drivers, including N2 volume production, the HBM4 transition, technology upgrades, capacity expansion, the mature-node recovery, and Terafab investment, ultimately forming its directional view and preferred list for global semiconductor equipment stocks.
Methodology notes
Application-level breakdown and aggregation of WFE forecasts
The report divides global wafer fab equipment spending into foundry, DRAM, NAND, and Logic/Other, separately updates the amounts and year-over-year growth rates for each application over 2026–2028, and then aggregates them to form its overall WFE assessment.
Transmission of chip manufacturers' capital expenditures into equipment demand
The report begins with changes in capital expenditures by manufacturers such as TSMC, Samsung, SK Hynix, and Intel and combines them with equipment supplier outlooks to assess how these investments translate into wafer fab equipment market demand.
Analysis of capital expenditure, capacity additions, and the degree of supply tightness
The report examines not only the scale of equipment investment but also whether new investment can alleviate chip supply constraints. It concludes that DRAM may remain capacity-constrained through 2028 despite higher spending, while NAND spending focused primarily on upgrades will allow tight supply to persist through 2027.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Applied Materials Inc.Listed by Goldman Sachs as one of its globally preferred Buy-rated semiconductor equipment stocks.
- Strengths
- Buy-rated and included in the report's global preferred list.
- Lam Research Corp.Listed by Goldman Sachs as one of its globally preferred Buy-rated semiconductor equipment stocks.
- Strengths
- Buy-rated and included in the report's global preferred list.
- ASML Holding (ASML)Listed by Goldman Sachs as one of its globally preferred Buy-rated semiconductor equipment stocks.
- Strengths
- Buy-rated and included in the report's global preferred list.
- Tokyo ElectronListed by Goldman Sachs as one of its globally preferred Buy-rated semiconductor equipment stocks.
- Strengths
- Buy-rated and included in the report's global preferred list.
- ASM International (ASMI)Listed by Goldman Sachs as one of its globally preferred Buy-rated semiconductor equipment stocks.
- Strengths
- Buy-rated and included in the report's global preferred list.
- BE Semiconductor Industries (BESI)Listed by Goldman Sachs as one of its globally preferred Buy-rated semiconductor equipment stocks.
- Strengths
- Buy-rated and included in the report's global preferred list.
- LasertecListed by Goldman Sachs as one of its globally preferred Buy-rated semiconductor equipment stocks.
- Strengths
- Buy-rated and included in the report's global preferred list.
- EbaraListed by Goldman Sachs as one of its globally preferred Buy-rated semiconductor equipment stocks.
- Strengths
- Buy-rated and included in the report's global preferred list.
Key data
- New overall WFE forecasts for 2026–2028$150/$218/$281 bnThe report body presents growth rates of +36%/+45%/+29%.
- Previous overall WFE forecasts for 2026–2028$141/$186/$208 bnThe previous forecasts corresponded to growth rates of +28%/+32%/+12%.
- 2026 WFE growth rate shown in Exhibit 145%The chart text states that the previous forecast was 32%, with growth driven by foundry and DRAM.
- New foundry WFE forecasts$58/$84/$109 bnCorresponding to year-over-year growth of +45%/+45%/+30% in 2026/2027/2028; the previous forecasts were $52/$68/$78 bn and +30%/+30%/+16%.
- TSMC capital expenditure forecast revisionRaised by $8 bn per year from 2026 through 2028Reflects higher N2 capital intensity and sustained customer demand.
- New DRAM WFE forecasts$48/$72/$97 bnCorresponding to year-over-year growth of +50%/+50%/+35%; the previous forecasts were $46/$67/$74 bn and +45%/+45%/+10%.
- DRAM capital expenditure revisionsSamsung +22%; SK Hynix +19%The increases in average 2026–2028 capital expenditure forecasts versus the previous update.
- New NAND WFE forecasts$11/$15/$22 bnCorresponding to year-over-year growth of +35%/+35%/+50%; the previous forecasts were $11/$17/$20 bn and +40%/+50%/+15%.
- New Logic/Other WFE forecasts$34/$47/$53 bnCorresponding to year-over-year growth of +11%/+40%/+12%; the previous forecasts were $32/$35/$37 bn and +5%/+9%/+6%.
- Committed investment in the initial phase of Terafabapproximately $16.8 bnCommitted by SpaceX and Tesla and incorporated into the Logic/Other WFE forecasts.
- Supply constraint timeline assessmentDRAM through 2028; NAND tight through 2027DRAM remains capacity-constrained after increased spending, while recent incremental NAND spending is primarily directed toward upgrades.
Impact & implications
Goldman Sachs believes global WFE growth no longer depends on a single application: advanced-node foundry and DRAM provide near-term momentum, while NAND, mature nodes, analog chips, and Terafab investment enhance medium-term durability. Higher chip manufacturing capital expenditures and persistent capacity constraints jointly support equipment demand. The report therefore maintains its bullish stance on global semiconductor capital equipment stocks and continues to prefer eight Buy-rated names.