Applied Materials, other chip gear stocks at record highs - MSN

Amid the continued surge in artificial intelligence-driven demand, semiconductor equipment stocks are experiencing a strong upward trend, with Applied Materials and other chip gear companies reaching ... Read original →

The AI compute arms race is triggering a structural boom in semiconductor equipment. With WFE spending projected to exceed $145B in 2026, the demand stems from extreme scaling in advanced packaging and EUV lithography, intensifying technical gaps in deposition, metrology, and etch tools. Geopolitical compliance has become a fixed cost: U.S. export controls compel Chinese firms like CXMT and SMIC to accelerate localization, yet equipment lead times have stretched by over 30%, eroding capital efficiency. TSMC (Taiwan, China) benefits from AI chip orders but faces delayed approvals for ASML/Nikon tools, while Intel leverages CHIPS Act subsidies to secure domestic capacity. Over the next 18 months, equipment vendors will pivot from selling tools to guaranteeing wafer output—boosting service and consumables revenue. This AI-fueled capex surge is, in essence, a physical manifestation of global manufacturing sovereignty competition: whoever controls the tools defines the next-generation chip ecosystem.