As August 2026 begins, the global semiconductor supply chain hit another milestone. SEMI's mid-year forecast projects 2026 global semiconductor manufacturing equipment sales of $165.9 billion, up 23.2% year-on-year, a record; more crucially, this momentum is no flash in the pan—SEMI expects five consecutive years of growth, with total sales reaching $229.5 billion by 2028.
Mirroring the macro data, capital markets reacted sharply. After a deep correction of over 36% in July, A-share semiconductor equipment stocks rebounded strongly on August 5, with the semiconductor equipment index surging more than 9% intraday and closing up 8.23%, while the STAR 50 index led the broader market. On one hand, industry prosperity keeps rising; on the other, trading-level volatility is intense—making semiconductor equipment a key lens for understanding "why invest in chips."
SEMI Defines a "Super Cycle": $165.9B Is Just the Start
SEMI's Mid-Year Total Semiconductor Equipment Market Forecast, released in late July, points out that AI-driven demand is reshaping semiconductor manufacturing investment. In 2026, global semiconductor manufacturing equipment sales will reach $165.9 billion, up 23.2% year-on-year; momentum will persist, reaching a historic $229.5 billion by 2028, setting records for five straight years. SEMI stresses this growth is not a traditional inventory replenishment cycle but a structural expansion supported by AI computing infrastructure, advanced memory expansion, and advanced packaging investment.
This view aligns closely with supply chain feedback. UBS is even more aggressive: global wafer fab equipment spending will hit about $147 billion in 2026, $198 billion in 2027, and $247.5 billion in 2028—meaning the market more than doubles in three years. Goldman Sachs estimates AI capital expenditure on computing, data centers, and power will reach about $7.6 trillion from 2026 to 2031, providing long-term fuel for the equipment super cycle.
Samsung, SK Hynix Evaluating AMEC Equipment: Domestic Gear Moves from "Substitution" to "Going Global"
Even more telling than record sales is this major development: according to Reuters, Samsung Electronics and SK Hynix are evaluating chipmaking equipment from AMEC for potential use in their China factories, to hedge against uncertainties in U.S. export controls.
AMEC equipment has already been adopted in volume by leading Chinese chipmakers like YMTC. Its etching technology spans from mature 65nm to advanced 5nm and 3nm nodes, with some products entering TSMC's supply chain; SMIC is said to have purchased over 800 AMEC tools. These track records have built confidence among Samsung and SK Hynix in AMEC's maturity.
The geopolitical backdrop is telling. In 2023, the U.S. Commerce Department granted Samsung and SK Hynix "Validated End User" (VEU) status for their China plants, allowing import of certain controlled equipment without per-order licenses; after revocation in 2025, both giants applied for annual licenses in 2026. Now, seeking to maintain and upgrade existing lines, they see Chinese equipment makers as a "Plan B." Per TrendForce estimates, in 2026 SK Hynix produces roughly 30-40% of its DRAM and Samsung about 30% of its NAND in China—lines heavily dependent on etching equipment.
Note this is not a simple "switch." According to ETNews, Samsung and SK Hynix are simultaneously reducing reliance on Chinese-capital equipment in sensitive advanced process nodes, pursuing a dual-track strategy: using domestic equipment for China plants to secure capacity while de-Chinaizing advanced lines. Either way, if domestic equipment transitions from "import substitution" to "export supply," the sector's pricing logic will be rewritten from "domestic market share" to "global competition," vastly expanding the growth narrative.
AMEC Net Profit Up Over 280%: Equipment Leader's Earnings Confirm the Trend
Beyond headlines, fundamentals provide hard validation. On the evening of August 3, AMEC disclosed its H1 2026 earnings forecast: revenue of about RMB 6.691 billion, up 34.89% year-on-year; net profit attributable to shareholders of RMB 2.7-2.9 billion, up 282%-311%. In Q2 alone, net profit is expected at RMB 1.77-1.97 billion, up 90%-111% quarter-on-quarter, showing clear acceleration.
The announcement shows AMEC had over 8,800 reaction chambers in mass production across more than 220 production lines globally, developing 54 types of high-end equipment covering etching, thin film, polishing, and inspection. Citi's latest report sees AMEC's addressable market expanding and new orders growing strongly, lifting its target price sharply by 66% to RMB 460.
AMEC is not alone. As of early August, 7 of 9 A-share semiconductor equipment companies disclosing forecasts reported profit growth: ChuangCheng Technology's H1 non-GAAP net profit is expected up 110%-134%, and Fuchuang Precision up 877%-1121%. Looking back at Q1 2026, A-share equipment sector revenue grew 24.66% year-on-year, while net profit surged 57.69%—profit growth 2.3 times revenue growth. The sector has crossed the "price-for-volume" introduction phase, and scale effects are accelerating.
Why Look at Equipment First When Investing in Chips? Three Logics
Logic One: Pricing Power Structurally Shifts Upstream from End Products to Equipment
CSC Financial notes that pricing power in the semiconductor chain is shifting from chip end products to equipment and components. Component makers are smaller with higher fixed-cost ratios, so price hikes translate directly into profits; fab expansion cycles take 12-18 months, making supply elasticity the weakest. Currently, global equipment components face a full-chain price hike wave, overseas supplier lead times have extended significantly, and import substitution windows are opening in valves/pipes, ceramic parts, RF power supplies, gas boxes, and more.
Logic Two: Unprecedented Order Visibility
UBS highlighted a rare signal in June: some customers have provided equipment suppliers with up to eight quarters of demand visibility—never seen in UBS's nearly 30 years covering the industry. Supporting this, Micron's 16 strategic customer agreements cover about 20% of DRAM output and one-third of NAND output, locking in roughly $100 billion in revenue even at price floors. Committing real money to the future is the strongest proof of cycle durability.
Logic Three: Global Capex Resonance
TSMC sharply raised its 2026 capex guidance to $60-64 billion, a record; Samsung's 2026 semiconductor investment is about $40 billion, focused on HBM expansion; Micron at $27 billion and SK Hynix at $28.6 billion are going all in; SMIC is expanding counter-cyclically in mature nodes at about $8.1 billion. The top five fabs alone account for combined capex exceeding $160 billion. HBM4 and advanced packaging expansions directly drive explosive demand for etching, thin-film deposition, and lithography equipment. Overseas giants KLA and Lam Research have raised 2026 global fab equipment spending expectations to over $150 billion, with KLA calling its visibility into H2 2027 "unprecedented."
Opportunities Amid Divergence: Who Delivers on Both "Earnings + Orders"
The flip side of high prosperity is sharp divergence. In Q1 2026, Shenwan semiconductor equipment sector revenue growth ranged from -95% to 121%, and net profit growth from -245% to 488%—fire and ice. The market is shifting from "sector beta" to "prosperity tier" pricing: high net profit growth proves smooth delivery of earlier orders, while surging contract liabilities signal new orders still flowing in; companies where both align are the strongest tier. ChuangCheng Technology's net profit tripled with contract liabilities up 38%, and Liandong Technology shows similar "double high" traits, reflecting real prosperity from AI chip packaging and testing demand. But companies with high profit growth yet declining contract liabilities warrant caution about a "gap" after concentrated delivery of earlier orders.
Risks and Outlook: The Super Cycle Is Not Without Uncertainty
Admittedly, this super cycle carries concerns. July's A-share semiconductor equipment sector pulled back over 36%, essentially trading-level deleveraging and position clearing rather than a systemic reversal of industry logic—Huatai Securities sees a "trading bottom emerging," CITIC Securities judges the crowded-trade correction near its end, and CICC believes the steepest deleveraging phase may be over. Citi explicitly says "oversold means opportunity" and prefers equipment stocks over the broader chip industry because "upward capex revisions give stronger earnings upgrade momentum," with equipment makers' EPS upgrade magnitudes stably at 10%-11%.
Risk signals cannot be ignored: Meta's plan to rent out idle AI computing capacity has sparked concerns about AI overcapacity; Google's TurboQuant technology can compress LLM KV-cache memory usage by six times—if such technologies scale, the demand curve for AI memory and compute could flatten. Late August's dense interim report releases and Nvidia earnings will be key windows to test the equipment sector's strength, where earnings delivery and long-term order visibility will jointly determine sector direction.
For the question "why invest in chips," this equipment super cycle provides a clear answer: within the chip supply chain, equipment sits at the very front of capex transmission, offers the highest order visibility, and delivers the most confirmed earnings—making it the most certain link when investing in chips. As the record $165.9 billion figure lands and domestic equipment knocks on the doors of global giants, the investment value of the equipment track is being redefined.
