Who Benefits from Semiconductor Industry Growth?

The starting point is unambiguous: in its Equipment Forecast of 14 July 2026, the industry association SEMI projects global equipment revenue of USD 165.9 billion for 2026 and USD 229.5 billion for 2028. That is an increase of 38.3 percent in two years, or 17.6 percent per year, and SEMI expects five consecutive years of growth. The figures refer to worldwide OEM revenue of equipment makers – what chipmakers spend on new tools.

The largest share of this growth comes from wafer fab equipment (WFE), which is expected to grow from USD 143.9 billion to around USD 200.0 billion – a gain of 39.0 percent and USD 56.1 billion of additional equipment revenue. Test equipment grows from USD 15.3 billion to 20.8 billion, and assembly and packaging equipment from USD 6.7 billion to 8.6 billion. All three segments grow, but at very different absolute scales: WFE remains by far the largest segment, while test and packaging remain comparatively small markets.

For a supplier's management, the whitepaper's central conclusion is that the market grows broadly but not evenly. Segment, process step, equipment mix and qualification status determine which part of the forecast is reachable for an individual company at all. A supplier whose parts are built into only one segment or a single equipment programme faces a different market than a specialist qualified at several equipment makers. The size of the overall market must therefore not be equated with individual revenue potential.

The whitepaper deliberately uses the SEMI figures as a frame, not as a promise. The 2026 and 2028 values are marked as forecasts, and the percentage changes between the two years are NEXERY's own calculations based on SEMI data. Anyone who wants to derive an investment decision from market growth has to work through the chain from the overall market via the segment and the specific customer programme down to their own approved output – and that chain is exactly what the following chapters build.

Before a company's revenue potential can be determined, it must be clear where in the chain it sits. The whitepaper describes equipment value creation with a six-stage role model, presented as an isometric NEXERY synthesis. It begins with accompanying research: institutes such as imec and pilot lines – for example the NanoIC pilot line funded by the European Commission – trial new processes before they are adopted in production tools. Equipment makers such as ASML and Applied Materials integrate the complete systems. Key technologies come from partners such as ZEISS and TRUMPF, which supply optics and laser sources. Subsystem suppliers such as VAT and MKS contribute vacuum and process systems. Below them sit the sub-tier suppliers (tier n) with materials, precision parts and special processes. At the end of the chain are the chipmakers as customers, who install and operate the tools.

Two clarifications matter. First, "tier n" denotes an upstream supply stage, not a size class: a sub-tier supplier can be a small specialist or a large materials group. Second, service and retrofit act not only at the point of sale but along the entire installed base – a point that returns when earning power is assessed. The supply relationship determines the stage: a company that supplies the equipment maker directly has different customer access and different qualification processes than a supplier that enters the tool via a subsystem supplier.

The management summary condenses this under "specialisation creates customer access": optics, vacuum technology and precision parts illustrate the roles of suppliers, research accompanies technical development, and the supply stage depends on the customer relationship. The role model is explicitly schematic – the companies named are examples, not a complete map and not a ranking. But it provides the structure a supplier can use to place its own position, its customers and its dependencies. The sources for this chapter are the annual reports of ASML, ZEISS, TRUMPF, VAT and MKS as well as the overviews from imec and the European Commission on the NanoIC pilot line.

Within the equipment market, growth curves diverge widely. According to NEXERY's calculation based on the SEMI Equipment Forecast of July 2026, equipment for NAND memory grows by a cumulative 49.6 percent from 2026 to 2028, DRAM equipment by 46.6 percent and test equipment by 35.9 percent. Memory and test thus gain weight, and component demand follows this equipment mix.

Technological shifts sit behind the numbers. High bandwidth memory (HBM) and additional NAND layers change the demand for deposition, etch, vacuum and radio-frequency technology. Leading-edge logic chips require more demanding lithography and process control. Packaging and test connect and verify several chip building blocks. The whitepaper therefore assigns the process steps to three fields: logic stands for lithography and process control, memory for deposition and etch, packaging and test for bonding, testing and measuring. A supplier must therefore assess not the segment growth but the specific equipment programme and its own parts demand.

The chapter's second insight is decisive: equal growth rates do not automatically lead to equal margins or recurring revenue. What determines earning power is the importance in the process, the duration of qualification, the installed base, access to the service business and usability across several equipment platforms. The whitepaper illustrates this with four technical positions and their business models. In lithography and optics, ASML integrates the complete tool while ZEISS and TRUMPF supply jointly developed key technologies; high entry barriers are offset by strong dependence on a few programmes and roadmaps. In deposition and etch, Applied Materials, Lam Research and Tokyo Electron combine process know-how, installed base and services – value is created at the tool sale and over the entire service life. In process monitoring, KLA and specialists earn revenue from data, metrology and inspection; more complex technology generations increase the need for measurement and control. In packaging and test, Advantest and Besi benefit from HBM, chiplets and growing test complexity, but their markets remain cyclical.

For a supplier this means the question is not only whether its own segment grows, but whether its position in the process is relevant enough to share in qualifications, service and platforms. The companies named are illustrative examples; the percentages are cumulative forecasts for 2026 to 2028.

Subsystem specialists hold a particularly interesting position in the chain. Vacuum technology, radio-frequency power and metrology combine technical specialisation with access to several equipment makers. The whitepaper names four examples: VAT for vacuum valves, MKS for process and RF systems, Comet for RF power supply and INFICON for measurement and leak detection. Several customers broaden sales. How attractive a position really is, however, also depends on customer concentration, platform access and service revenue. And a qualification only applies within the agreed technical scope – a part approved for one platform is not automatically qualified for the next. The examples are explicitly not a ranking; the sources are the four companies' 2025/26 reports.

What growth means operationally at this stage is shown by the VAT case, based on the half-year release of 22 July 2026. Order intake rose by 75.0 percent year on year to CHF 856.4 million in the first half of 2026. Sales, at CHF 511.9 million, were 8.3 percent below the prior-year figure – but at constant exchange rates the change was +0.1 percent. Currency effects therefore explain a substantial part of the reported sales decline. At the same time VAT built capacity: the number of full-time equivalents rose by 709 to 3,959 between December 2025 and June 2026, an increase of 22 percent; compared with June 2025 the increase was 16.2 percent. The company reports costs of capacity build-up and the expansion of its supply chain. Free cash flow was CHF 41.8 million, 17.6 percent below the prior-year level.

The case demonstrates that high order intake requires staff, additional capacity and pre-financing. The build-up causes expense before the full delivery and revenue level is reached. At the same time the whitepaper draws clear limits: the figures prove neither a sole cause at small sub-tier suppliers nor their general overload, and the reported sales decline must be separated from currency effects. It is a single case, not a representative sample. The key takeaway is nevertheless unambiguous: for the growth decision, what counts are achievable delivery volumes, the cost of capacity build-up and financing. Strong order momentum alone does not replace this review.

The core of the whitepaper is an illustrative annual calculation for a qualified part. All values are NEXERY assumptions and not a company forecast; the calculation is not a real company case. Its purpose is to make the chain from market forecast to a company's own revenue transparent.

The starting point is the customer programme: 150 tools with 200 parts each, in which the supplier holds a 40 percent supply share, result in a demand of 12,000 parts per year. The second step is the approved good quantity: with 12,000 gross parts of capacity and a usable yield of 85 percent, 10,200 parts are deliverable. From this follows achievable revenue: 10,200 deliverable parts at EUR 250 each yield EUR 2.55 million, given sufficient demand. The difference is the revenue gap: 1,800 missing good parts at EUR 250 correspond to EUR 450,000 that the supplier does not realise despite existing demand. Only approved good parts serve demand – the tool count alone says nothing about revenue.

The third part of the calculation separates revenue, earnings and financing. With assumed variable costs of EUR 175 per good part, EUR 765,000 of contribution margin remains. After EUR 200,000 of additional ramp-up costs, EUR 565,000 is left before existing fixed costs. Separate from this is the financing need: EUR 450,000 of investment and EUR 350,000 of additional working capital add up to EUR 800,000 that must be pre-financed before revenue flows. The whitepaper presents these relationships as a waterfall from revenue via variable costs and ramp-up costs to the result before fixed costs, plus a separate financing block.

The message for management is that additional revenue requires investment and working capital. Contribution margin, ramp-up costs and financing therefore belong in every growth decision – assessed separately, because a positive contribution margin says nothing yet about liquidity during the ramp-up phase. The four calculation steps can be reproduced directly with a company's own programme data – tool count, parts per tool, supply share, yield, unit price, variable costs. All values are annual figures; revenue is stated net of VAT.

From market data, position analysis and model calculation, the whitepaper derives a decision model with four options. Three criteria decide the next investment: technical fit, access to the customer and economic contribution. For each option the model states when it makes sense and which decision comes next.

The first option concerns the existing business: expand capacity. It makes sense when a customer has robust additional demand, the part is qualified and the additional good quantity delivers a positive contribution margin. The next decision is then to release expansion and financing. The second option targets further customers: expand the customer base. It fits when the existing technology suits further equipment programmes and adaptation as well as re-qualification are viable in time and cost. The next step is to define a pilot customer and a qualification plan. The third option opens a new growth field: enter a new segment. The prerequisite is a clear competence advantage meeting verifiable customer demand, with development time and loss risk matching the available means. Development and trials are then financed in stages. The fourth option is deliberate restraint: limit the commitment. It applies when customer access remains open or costs, qualification duration and capital tie-up exceed the expected economic contribution. The consequence is to suspend expansion and review alternatives.

The model is meant to be applied to the specific company and customer programme – it does not replace an individual review, but it sets an order in which technology, customer access and economics are examined. Methodologically the whitepaper rests on 18 external core sources: the SEMI Equipment Forecast (sources as of 10 August 2026) and annual and half-year reports from ASML, Applied Materials, Lam Research, KLA, Tokyo Electron, ASM, Advantest, Besi, ZEISS, TRUMPF, VAT, MKS, Comet and INFICON, supplemented by imec and the European Commission on the NanoIC pilot line. External forecasts, company disclosures and NEXERY's own model assumptions are consistently marked separately; editorial source verification took place in September 2026. The publication serves strategic orientation and does not replace individual advice. A second paper deepens operational implementation: reviewing critical suppliers, securing qualified capacity and financing the ramp-up.