The global computing power race, fueled by artificial intelligence, is entering a new phase, and the beneficiaries are expanding beyond GPU manufacturers.
According to a recent semiconductor industry report from JPMorgan, global semiconductor capital expenditure is undergoing a comprehensive upward revision, driven by continued heavy investment in AI infrastructure by cloud computing giants, the storage industry entering a new upcycle, and persistently tight supply of advanced process nodes.
As a forward-looking indicator of industry expansion intentions, growth expectations for the Wafer Fab Equipment (WFE) market have been significantly raised, with the potential for double-digit growth for three consecutive years. Specifically, the report has increased its forecast for global WFE market growth in 2026 from 21% to 28%, and for 2027 from 18% to 29%, while also projecting for the first time that growth will continue at 16% in 2028.
If the market narrative over the past two years has been an "AI chip bull market," JPMorgan suggests the coming years may usher in a "semiconductor expansion bull market" encompassing wafer fabs, storage, advanced packaging, and equipment suppliers.
AI Demand Spillover Leads to Further Upward Revision for Equipment Market
JPMorgan projects that the global WFE market size will grow from $124.5 billion in 2025 to $158.8 billion in 2026, $205.0 billion in 2027, and further rise to $237.3 billion in 2028.
The core factors driving this forecast revision stem from the storage and advanced process sectors. The report notes that while concerns about insufficient cleanroom capacity were once seen as a major bottleneck for 2026 expansion, this constraint is gradually easing as fabs optimize existing facility utilization and plan new capacity ahead of schedule.
Simultaneously, global semiconductor demand remains robust. Data shows that global semiconductor sales in April 2026 increased by 106% year-over-year, marking the strongest growth record since 1994. The significant price increases for DRAM and NAND were primary drivers, and even excluding storage chips, industry revenue growth still reached 33%.
AI Capital Expenditure Continues Its Run
The fundamental driver behind this round of industry forecast upgrades is the "near-uncontrollable" AI investment frenzy among major tech giants.
JPMorgan expects the capital expenditure of the four major US cloud service providers—Google, Amazon, Microsoft, and Meta—to increase by 80% year-over-year in 2026, higher than the previous forecast of 63%, and to maintain a 50% growth rate in 2027. In monetary terms, the combined capital expenditure of these four companies is projected to exceed $575 billion in 2026 and further rise to $860 billion in 2027, representing over $500 billion in new investment over two years.
More importantly, the structure of AI investment is shifting. While funds have largely flowed to GPUs and AI accelerators in recent years, the importance of memory, networking, CPUs, ASICs, and advanced packaging is rapidly increasing as AI applications move from training to inference. JPMorgan estimates that the storage component of cloud providers' capital expenditure will surge from a single-digit percentage to around 15% historically, to approximately 50% by 2026.
This implies that future incremental investment will begin to diffuse from GPU clusters across the entire semiconductor supply chain.
Storage Expansion Accelerates, with DRAM Driving Equipment Market Growth
In this capital expenditure cycle, the storage industry is re-emerging as a core direction for capacity expansion.
The report indicates that total capital expenditure for the global storage industry over the next three years will reach $450 billion, a significant upward revision from the previous level of $300 billion. Within this, DRAM investment is expected to account for $364 billion, representing the dominant share.
On the demand side, the need for HBM and high-performance memory from AI servers continues to climb. On the supply side, the availability of EUV equipment and infrastructure construction progress impose hard constraints on capacity release. Given this supply-demand mismatch, a tight balance in the industry is expected to persist for an extended period.
The report forecasts that DRAM industry capital expenditure will grow by 54% year-over-year in 2026 and by another 37% in 2027, positioning it as one of the primary drivers of growth in the equipment market.
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