The race to manufacture more and better chips is no longer solely about “who designs the largest model,” but about something much more tangible: how many tools are installed in factories, how many production lines are automated, and how much real capacity is brought online. That gauge — the global sales of semiconductor equipment — is pointing to all-time highs.
According to forecasts presented by SEMI at Semicon Japan, worldwide sales of semiconductor manufacturing equipment will grow by a 13.7% in 2025 to reach a record of $133 billion. And, if the cycle continues uninterrupted, the upward trend would extend into 2026 ($145 billion) and 2027 ($156 billion), chaining three years of expansion in a sector where curves tend to be less linear than they appear.
AI, yes… but also “factories reshaping themselves from the inside”
The dominant narrative still centers on AI, because it’s driving an aggressive renewal of the industrial landscape: leading-edge nodes, DRAM, and especially HBM memory to power accelerators. But what’s most relevant in this phase of the cycle is that growth isn’t limited to “more GPUs”: investments are also pouring into how increasingly complex chips are assembled, tested, and packaged.
In practice, industry is investing simultaneously in three areas:
- Front-end: wafer tools (lithography, deposition, etching, metrology) for advanced nodes.
- Back-end: testing and assembly/packaging equipment, increasingly critical for final performance and power efficiency.
- Heterogeneous integration: the industrial “glue” to combine chiplets, memory, and accelerators into a single product without increasing costs or latencies.
Front-end leads… but back-end is making an unusual leap
Within the total, SEMI projects investment in wafer fab equipment (WFE) to reach $115.7 billion in 2025, an 11% year-over-year increase. This is the segment that usually grabs the spotlight because that’s where the capacity for advanced nodes is determined.
But the most striking figure — in terms of speed, not volume — is in the back-end. SEMI forecasts that in 2025:
- The testing equipment will grow by 48.1%, reaching $11.2 billion.
- The assembly and packaging equipment will increase by 19.6%, totaling $6.4 billion.
In other words: not only are more chips being manufactured; companies are paying heavily to verify faster, better classify, and pack chips in ways that, just a few years ago, were almost “laboratory craftsmanship” — and now are part of industrial production.
2 nm, GAA, and the return of the “difficult chip”
The forecast also aligns with the technological landscape anticipated for 2026-2027: the transition to 2 nm nodes with gate-all-around (GAA) architectures and the normalization of heterogeneous integration as standard, not as an exception.
This has a practical consequence: as the final product consists of more components (chiplets, HBM, interposers, advanced packaging), the factory becomes more sensitive to any bottleneck. The outcome is an industry obsessed with two words that sound unglamorous but are critical: performance (yield) and utilization.
The “chain effect”: when the bottleneck shifts
This cycle also highlights an uncomfortable reality for many organizations: the bottleneck moves. If you buy front-end capacity but don’t invest in testing and packaging, you end up with “half-finished” value. If you accelerate packaging but don’t feed the line with enough wafers, capital remains underutilized.
Therefore, forecasts point to sustained and balanced growth: AI is driving strong demand, yes, but the market is learning that the final product depends on the entire chain, and that back-end is no longer “after” but a part of performance design.
A larger, more geopolitical market
In parallel, it’s impossible to separate equipment investment from the geopolitical context. Reuters already indicated in 2025 that investment in equipment and capacity remains heavily influenced by national strategies, technological restrictions, and self-sufficiency goals, with Asia maintaining a dominant share of spending.
This adds another layer of pressure: equipment isn’t just an industrial purchase — it’s a strategic decision that determines which countries and companies can manufacture what, and when.
Frequently Asked Questions
What does it mean that semiconductor equipment sales reach $133 billion?
It means fabs and assembly lines are buying machinery at record pace: more capacity, more automation, and more tools for advanced nodes and packaging.
Why is the chip testing market expected to grow so much in 2025?
Because AI chips, especially with HBM and complex packaging, require more testing, faster throughput, and higher precision to maintain yield and meet latency, power consumption, and reliability goals.
What is wafer fab equipment (WFE) and why does it account for such a large share of spending?
It includes equipment for processing wafers (lithography, deposition, etching, metrology, etc.). It’s where the real capacity for producing at advanced nodes is defined, setting the industry’s “ceiling.”
How are 2 nm (GAA) nodes related to the rise of advanced packaging?
As transistor scaling becomes more expensive and complex, the use of chiplets and heterogeneous integration increases. Packaging goes from being just an enclosure to a critical factor in system performance and design.
Source: SEMI (back-end figures: testing and assembly/packaging)