The forecast indicates strong growth across key semiconductor equipment segments, including wafer fabrication equipment, semiconductor test systems, and assembly and packaging equipment. Chip manufacturers worldwide are expanding production capacities to meet increasing demand from AI-powered computing, hyperscale data centres, automotive electronics and intelligent edge devices.
Wafer Fab Equipment (WFE), the largest segment in the semiconductor equipment market, is expected to reach USD 143.9 billion in 2026. Semiconductor test equipment is projected to record a 31% growth rate, reaching USD 15.3 billion as manufacturers focus on improving chip performance, reliability and advanced testing capabilities.
“AI is accelerating demand for more powerful and efficient chips, driving increased investment across the semiconductor capital equipment market,” said Ajit Manocha, SEMI President and CEO. “The mid-year forecast points to a higher equipment spending trajectory as chipmakers invest in the leading-edge logic, advanced memory, test and packaging capabilities required for the AI era.”
For India, the global semiconductor investment cycle arrives at a crucial stage as the country strengthens its position in the semiconductor and electronics manufacturing landscape. India has already approved 12 semiconductor manufacturing projects covering semiconductor fabrication plants, Assembly, Test, Marking and Packaging (ATMP), Outsourced Semiconductor Assembly and Test (OSAT) facilities, compound semiconductor manufacturing and display manufacturing. These projects represent investments exceeding USD 20 billion.
Supported by initiatives including the SEMICON India Programme, Production Linked Incentive (PLI), Electronics Component Manufacturing Scheme (ECMS), Electronics Manufacturing Clusters (EMC), Research, Development and Innovation (RDI), Artificial Intelligence Mission and continued policy focus on semiconductor design and manufacturing, India is developing a comprehensive semiconductor and electronics ecosystem.
“The strong global growth in semiconductor manufacturing equipment investment reflects the beginning of a new technology cycle powered by AI, advanced computing and intelligent electronics. For India, this momentum aligns perfectly with our national semiconductor mission. As India rapidly builds fabs, OSATs, display manufacturing and a robust ecosystem for equipment, materials and components, the country is becoming an increasingly attractive destination for global investments. This presents a significant opportunity not only for semiconductor manufacturing, but also for developing a strong domestic supply chain, fostering innovation, creating high-value jobs and integrating India more deeply into the global semiconductor value chain,” said Ashok Chandak, President, SEMI India.
The report also highlights sustained investments in advanced memory technologies, including HBM, DRAM and NAND, along with continued expansion in leading-edge logic manufacturing. While the semiconductor industry advances towards AI-focused and cutting-edge technologies, significant opportunities are also emerging in mature and specialty semiconductor nodes, where demand remains strong across automotive, industrial, power electronics, communications and consumer applications.
According to Ashok Chandak, India’s current semiconductor manufacturing roadmap and design focus are well positioned to benefit from this evolving market landscape. The country has the potential to become a competitive and trusted global manufacturing base while gradually moving higher in the semiconductor technology value chain.
The rising global demand for semiconductor manufacturing equipment is also expected to create opportunities for equipment manufacturers, specialty material suppliers, automation companies, precision engineering firms, component manufacturers and technology service providers seeking to expand their presence in India. As global companies diversify supply chains and governments encourage resilient semiconductor ecosystems, India is positioned to emerge as an important manufacturing, innovation and supply chain hub for the global semiconductor industry.
China, Taiwan and Korea are expected to remain the three largest destinations for semiconductor equipment spending through 2028. China is projected to retain the leading position during the forecast period, although its growth is expected to moderate in 2026 after several years of elevated investment.
In Taiwan, semiconductor equipment spending will be supported by advanced manufacturing capacity expansion for AI and high-performance computing applications. Korea’s investment growth will be driven by advanced memory technologies, particularly HBM. Other regions covered in the forecast are expected to witness higher equipment spending in 2027 and 2028, supported by supply chain regionalisation efforts, government incentives and targeted expansion of specialty semiconductor capacity.
The accelerating semiconductor equipment investment cycle reflects a major shift in the global technology landscape, with AI, advanced computing and intelligent electronics reshaping future chip demand. For India, the growing global focus on semiconductor manufacturing presents a significant opportunity to strengthen domestic capabilities, attract international investments, develop supply chain resilience and establish a stronger role in the global semiconductor value chain.
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