CITIC Securities' research report, drawing on SEMI data, indicates that the global market size for Wafer Fabrication Equipment (WFE) is expected to experience a 12% year-on-year growth in 2025, reaching a total of USD 117.3 billion. This upward trend is anticipated to persist, with projections showing a further 26% and 35% year-on-year increase in 2026 and 2027, respectively, culminating in market sizes of USD 147.8 billion and USD 199.5 billion. Within this market, the downstream Foundry and logic segments are forecasted to dominate with a 52% share by 2027, while the memory segment is projected to hold a 39% share (with DRAM and NAND accounting for 24% and 15%, respectively).
Considering the significant capital expenditures and expansion initiatives of major clients, top-tier semiconductor equipment companies are poised to continue capitalizing on the burgeoning demand for logic and memory products. Taking into account market demand, competitive dynamics, equipment expenditures, company performance, and valuations, CITIC Securities strongly endorses leading advanced lithography players, especially those with the potential to boost shipments of Extreme Ultraviolet (EUV) and Deep Ultraviolet (DUV) equipment. It also favors companies with substantial advantages in the DRAM sector and relatively lower valuations, as well as those with cutting-edge etching technology and the highest share of NAND revenue.
Additionally, the report suggests keeping a close eye on companies witnessing a surge in demand for metrology and inspection services, despite the potential for short-term profit margin pressures.