Guotai Haitong: The semiconductor equipment market is experiencing improved conditions, and it is recommended to focus on areas with certainty.

Guotai Haitong published a research report stating that in the next 2-3 years, Chinas semiconductor equipment will remain in a prosperous cycle. The core source of growth will come from structural capacity expansion in advanced processes, advanced memory, and advanced packaging, as well as the continuous increase in the market share of domestic equipment. It is recommended to focus on manufacturers related to etching, thin film deposition, cleaning, and CMP, while in terms of flexibility, areas like measurement, advanced packaging equipment, and high-end testing equipment are worth paying attention to. Guotai Haitong's main points are as follows: In 2026, capital expenditures from overseas major companies are expected to surge, with further acceleration anticipated in 2027. According to the latest management estimates, the capital expenditures of the four major cloud companies, along with Oracle, are projected to be around $790 billion in 2026. The significant increase in capital expenditures from overseas major companies strongly indicates that the semiconductor industry is entering a new cycle of substantial demand. Memory presents the strongest and most certain incremental growth for downstream, while advanced processes expand simultaneously. AI is directly driving HBM demand by pushing for both an increase in GPU shipment volume and a rise in memory capacity per card. Additionally, the expansion of server memory combined with the capacity squeeze effect of HBM further stimulates overall DRAM demand and boosts market conditions. SEMI's forecasts indicate that the global semiconductor manufacturing equipment market is entering a new upcycle driven by AI computing power, advanced logic, and memory expansion. Global equipment sales are expected to grow from $134.7 billion in 2025 to $165.9 billion in 2026, a year-on-year increase of 23.2%, and will further reach $201.2 billion and $229.5 billion in 2027 and 2028, respectively, with a compound annual growth rate of approximately 19.5% from 2025 to 2028. Risk warnings: Risks of downstream capital expenditures falling short of expectations, risks of cyclical fluctuations in the semiconductor industry, risks of technology development and iteration, risks of customer validation progress not meeting expectations, risks of domestic substitution progress not meeting expectations, risks of intensified market competition, risks from international trade and export controls, risks of core component supply, risks of high customer concentration, risks of order and revenue mismatch, risks of research and development investment and talent loss, risks of profitability not meeting expectations, risks of accounts receivable and cash flow, risks of valuation fluctuation, and risks of information and forecast deviation.