Goldman Sachs has significantly raised its global wafer fab equipment (WFE) spending projections for the next three years, lifting its 2026 to 2028 market size estimates to $150 billion, $218 billion, and $281 billion, respectively. The magnitude of these upward revisions is notably larger than prior forecasts, underscoring that the semiconductor capital expenditure cycle is accelerating with increasing momentum.
According to the research report released on August 23, 2026, the second-quarter earnings season revealed that semiconductor capital expenditure figures broadly exceeded expectations. This, combined with more optimistic forward guidance from equipment suppliers, drove the substantial forecast revision. The expected year-over-year growth rate for WFE in 2026 has been raised from 32% to 36%, the 2027 estimate has been lifted from 32% to 45%, and the 2028 projection has been upgraded from 12% to a robust 29%.
Goldman Sachs maintains its overall bullish stance on the semiconductor equipment sector. This upward revision carries direct implications for investors in equipment stocks, as higher capital expenditure expectations point to continuously improving order visibility for equipment makers, suggesting the industry's cyclical upturn could extend well into 2028.
Foundry segment: Taiwan Semiconductor Manufacturing's expansion fuels advanced node equipment demand
The report raises foundry WFE forecasts for 2026 through 2028 to $58 billion, $84 billion, and $109 billion, respectively, corresponding to year-over-year growth rates of 45%, 45%, and 30%. These figures represent a significant jump from the prior projections of 30%, 30%, and 16%.
The primary driver here is Taiwan Semiconductor Manufacturing. In this update, the annual capital expenditure forecast for Taiwan Semiconductor Manufacturing for each year from 2026 to 2028 has been raised by $8 billion, attributed to higher-than-expected equipment intensity for the N2 process node and sustained robust customer demand. The report notes that as N2 enters its production ramp-up phase over the coming quarters, foundry WFE momentum will remain strong, with advanced logic processes serving as the core growth engine.
DRAM segment: HBM4 transition and capacity expansion push spending steadily higher
The upward adjustment in the DRAM segment is equally striking. DRAM WFE forecasts for 2026 to 2028 have been raised to $48 billion, $72 billion, and $97 billion, with growth rates of 50%, 50%, and 35%, respectively. These compare favorably to the earlier estimates of 45%, 45%, and 10%, with the 2028 growth projection seeing the most significant boost.
Analyst Giuni Lee has raised the average DRAM capital expenditure forecast for Samsung Electronics over 2026 to 2028 by 22%, and for SK Hynix by 19%. Despite the substantial increase in overall industry spending, DRAM supply is expected to remain tight, with capacity constraints projected to persist through 2028. Process node migration and the transition to HBM4 form the core logic underpinning this assessment.
NAND segment: Near-term focus on upgrades, with tight supply extending into 2027
Compared to DRAM and foundry, the forecast adjustments in the NAND segment are more moderate and show some divergence in direction. The report trims the 2026 NAND WFE forecast from $11 billion to $11 billion (essentially flat), lowers the 2027 estimate from $17 billion to $15 billion, but raises the 2028 figure from $20 billion to $22 billion.
Incremental spending in the NAND segment will primarily target upgrades and retrofits rather than large-scale new capacity additions. This strategy is expected to sustain a tight supply environment through 2027. The acceleration in spending for 2028, however, reflects longer-term capacity expansion expectations.
Logic and other segment: Intel recovery and Terafab project deliver upside surprises
The upward revisions in the Logic/Other segment are especially pronounced over the medium to long term. The report raises Logic/Other WFE forecasts for 2026 through 2028 to $34 billion, $47 billion, and $53 billion, with the 2027 projection up 34% from the prior $35 billion and the 2028 figure up 43% from the earlier $37 billion.
Two key factors drive this increase: first, Intel's demand has come in better than expected, prompting upward revisions to its capital expenditure forecasts; second, back-end process and analog chip markets are in recovery. Additionally, SpaceX and Tesla have collectively committed approximately $16.8 billion to the initial phase of the Terafab project, and these expenditures have been incorporated into the Logic/Other forecasts, representing a significant source of incremental growth for this segment over the medium term.