JPMorgan Raises 2026-27 Semiconductor Equipment Market Forecasts
Alina Collins
JPMorgan has raised its 2026-27 global wafer fab equipment growth forecasts to 28% and 29%, driven by surging cloud capex, TSMC expansion, and a massive memory-chip investment upgrade — signaling the strongest semiconductor equipment upcycle in nearly a decade.
How big is this upgrade?
JPMorgan raised its 2026 global wafer fab equipment (WFE — the full suite of machines needed to manufacture chips) growth forecast from 21% to 28% YoY, 2027 from 18% to 29%, and issued its first 2028 estimate at 16% YoY.
This means → the market now expects three consecutive years of high growth, a pattern extremely rare in semiconductor equipment history.
The core drivers are DRAM and TSMC capex acceleration; logic and NAND equipment forecasts were also nudged higher.
The 2025 global WFE market grew 11% YoY; China, accounting for 35%-40% of the total, dipped slightly due to a high base effect.
Why are cloud giants spending so aggressively?
JPMorgan raised its capex growth forecast for the top four U.S. cloud providers (Google, Amazon, Microsoft, Meta): 2026 from 63% to 80%, 2027 from above 40% to 50%.
In plain terms = these four companies will spend over $250 billion more than the prior year in 2026 and over $285 billion more in 2027 — the largest step-up increases on record.
The hard constraint behind the spending is power: North American data center planned capacity is expected to exceed 205 GW by end-2026, with installed capacity rising from 48 GW in 2025 to 65 GW in 2026 and 85 GW in 2027.
This reflects a structural shift as AI workloads migrate from training to inference. Inference demands far more memory chips — JPMorgan expects memory's share of cloud capex to jump from single digits–15% to roughly 50% in 2026.
Where is TSMC and memory capex going?
TSMC capex is expected to grow 37% to $56 billion in 2026, 16% to $65 billion in 2027, and 11% to $72 billion in 2028 — all significantly above prior estimates.
Advanced-node (N5 and below) supply shortages are expected to persist into 2027 or early 2028. CoWoS — a packaging technology that stacks chips and high-bandwidth memory together — is forecast to reach monthly capacity of 115,000 wafers by end-2026, rising to 220,000 by end-2028.
Memory capex is even more aggressive: the three-year industry total was raised from $300 billion to $450 billion, with DRAM at $364 billion.
This means → DRAM capacity is planned to expand to 2.8 million wafers per month by end-2028, up 880,000 from end-2025 — EUV lithography procurement and infrastructure buildout could become the primary bottlenecks.
How strong are the demand signals?
Global semiconductor shipments surged 106% YoY in April 2026 — the strongest growth since 1994 and the 32nd consecutive month of YoY increases.
In plain terms = even stripping out memory-chip price gains, growth still ran at 33% YoY — this is real volume, not a pricing bubble.
At JPMorgan's TMT conference in Boston (May 18-20), nearly every attending company reported that orders, backlogs, and urgent customer requests continued to build in the weeks following earnings. KLA said its visibility into next year's demand was the highest in over a decade.
How long can this cycle last?
Cleanroom shortages were a potential constraint for 2026, but JPMorgan notes that creative use of existing fab space is improving the outlook.
From 2027 onward, cleanroom expansions will begin in earnest, releasing further demand. MKS Instruments is scaling its organization to support a $165-180 billion WFE market in 2027 and beyond.
This means → whether supply and demand can rebalance after 2028 will be the key test of this upcycle's durability — for now, equipment makers' order books remain well-stocked through at least 2028.
Content is for reference only, not financial advice.