AI Chip Demand Triggers Semiconductor Equipment Investment Wave: Why Now Is the Key Moment to Position in Chip Sector?

SEMI Report: Global Semiconductor Equipment Capex to Hit New High in 2027

On July 27, 2026, the International Semiconductor Industry Association (SEMI) released its latest "Global Semiconductor Equipment Market Outlook" report, forecasting global semiconductor equipment capital expenditure to reach $205 billion in 2027, up 15% from 2026, a new record high. The report pointed out that the explosive growth in demand for artificial intelligence (AI) and high-performance computing (HPC) chips is the main driving force, while memory manufacturers have also increased investment to meet data center and edge computing needs.

AI Chip Capacity Race Drives Equipment Investment Wave

As the parameter scale of generative AI models continues to expand, demand for advanced process chips (such as 3nm and below) has surged. TSMC, Samsung, and Intel have announced plans to expand advanced process capacity in 2027, with TSMC aiming to increase 3nm and below capacity by 50% by the end of 2027. This has directly triggered a procurement boom for core equipment such as lithography machines, etching equipment, and thin film deposition equipment. Dutch company ASML saw its EUV lithography machine orders in Q2 2026 increase by 80% year-over-year, mostly from AI chip customers. SEMI President Ajit Manocha said: "AI is reshaping the semiconductor industry. The equipment investment cycle is closely tied to AI infrastructure deployment. We expect the equipment market to maintain double-digit growth over the next three years."

China’s Domestic Equipment Substitution Accelerates, Investment Logic Shifts

Against the geopolitical backdrop, the localization of semiconductor equipment in mainland China has significantly accelerated. SEMI data shows that the localization rate of semiconductor equipment in mainland China is expected to reach 25% in 2026 and may exceed 30% in 2027. Domestic etching machines, thin film deposition equipment, and cleaning equipment have been mass-introduced in foundries such as SMIC and Hua Hong Semiconductor. Meanwhile, domestic semiconductor equipment companies such as NAURA and AMEC are expected to see revenue growth of over 40% year-over-year in 2026, with even higher profit growth. This provides new opportunities for investors: besides focusing on global equipment leaders, domestic substitution targets also offer high growth potential.

Why Now Is the Key Moment to Position in the Chip Sector?

From an investment perspective, the chip sector has multiple drivers: First, AI and HPC demand is at an early explosive stage, with a compound annual growth rate of over 20% expected in the next five years; second, the semiconductor cycle is currently in an upswing, with inventory adjustments nearly complete, and a new round of capex peak is expected in 2027; third, there is still huge room for domestic substitution, as China's semiconductor equipment self-sufficiency rate is only 30%, and policy support and customer adoption will drive sustained high growth for relevant companies. Additionally, memory chips (such as HBM) benefit from AI inference demand, and prices are expected to continue rising in 2027. Overall, the chip sector currently has reasonable valuations and strong long-term growth certainty, making it a worthwhile technology track for key allocation.

Risk Warning

Global macroeconomic downturn may dampen demand
Geopolitical risks intensify, technology restrictions escalate
AI chip demand falls short of expectations, leading to overcapacity