Semiconductor investment spreads upstream to chipmaking equipment

Amid a historic, AI-driven semiconductor supercycle, upstream companies are benefiting – notably, the firms that make the machines that create the chips.

The semiconductor manufacturing equipment (SME) industry is seeing a sharp rise in billings, almost matching the near-parabolic trajectory for global chip shipments. This isn’t like the up-and-down cycles of 2019-23; even as semiconductor shipments have soared, chip shortages persist.

The wave of AI-driven capital expenditure is expanding production capacity for advanced logic chips, high-bandwidth memory and sophisticated advanced packaging technologies. Japanese firms such as Tokyo Electron supply many essential tools and materials; the Netherlands is home to ASML, the sole supplier of extreme ultraviolet (EUV) lithography systems.

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