Key Moments
- Bank of America lifted its 2026-2030 US semiconductor growth outlook to an 18% compound annual rate from 14%, led by memory and server strength.
- The bank now estimates the global semiconductor total addressable market at $3.2 trillion by 2030, up from a prior $2.7 trillion projection.
- Wafer fabrication equipment spending is forecast to climb to $156 billion in 2026 and $210 billion in 2027, with DRAM-related demand a major driver.
Upgraded Semiconductor Growth Trajectory
Bank of America has revised higher its outlook for the US semiconductor industry, now expecting an 18% compound annual growth rate between 2026 and 2030. This compares with its earlier projection of 14%, and is based on stronger anticipated demand for memory products and server-related components.
Alongside the growth rate upgrade, the bank now forecasts that the global semiconductor industry’s total addressable market will reach $3.2 trillion by 2030. This is an increase from its prior estimate of $2.7 trillion. The report highlights memory and data center-related activity as the primary engines of this expansion, with additional upside expected from a rebound in automotive and industrial end markets.
According to the report, the semiconductor sector took 50 years to achieve $1 trillion in total sales. From its current market size of $1.7 trillion, it is now anticipated to double within four years.
Wafer Fab Equipment and DRAM Spending Outlook
Bank of America also raised its projections for wafer fabrication equipment spending. The bank now expects this market to reach $156 billion in 2026, compared with its prior view of $144 billion, representing a 33% year-over-year increase. For 2027, the estimate has moved to $210 billion from $190 billion, implying a 34% annual gain.
The bank attributes much of this upward revision to stronger-than-expected demand for memory equipment, particularly for DRAM. For DRAM-related equipment alone, Bank of America now anticipates spending of $61 billion in 2026 and $85 billion in 2027.
Looking further out, the bank sees the wafer fabrication equipment market potentially expanding to $360 billion by 2030. This would correspond to a 23% compound annual growth rate from 2026 through 2030.
| Metric | Previous Estimate | Revised Estimate | Notes |
|---|---|---|---|
| US semiconductor CAGR (2026-2030) | 14% | 18% | Driven by memory and server demand |
| Total semiconductor TAM by 2030 | $2.7 trillion | $3.2 trillion | Memory and data center as main growth engines |
| Wafer fab equipment 2026 | $144 billion | $156 billion | 33% year-over-year increase |
| Wafer fab equipment 2027 | $190 billion | $210 billion | 34% annual gain |
| DRAM equipment spending 2026 | – | $61 billion | Segment-specific forecast |
| DRAM equipment spending 2027 | – | $85 billion | Segment-specific forecast |
| Wafer fab equipment market by 2030 | – | $360 billion | 23% CAGR (2026-2030) |
Data Center, AI Demand and Pricing Environment
Bank of America pointed to ongoing strength in customer orders and capacity commitments linked to data center and artificial intelligence applications. The report notes that memory prices have held steady on a week-over-week basis for both DRAM and NAND products.
In the high-performance computing space, GPU rental rates remain elevated. The bank cites pricing for Nvidia’s (NASDAQ:NVDA) B200 at $5.72 per hour, which is less than 10% below a March peak of around $6.10.
Valuations and Market Performance
The report observes that the Philadelphia Semiconductor Index has advanced 67% year-to-date. Despite the strong performance, Bank of America notes that the semiconductor group is trading at 18 times next twelve months price-to-earnings, which is below the S&P 500 multiple of 19 times.
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