Morgan Stanley Semiconductor Production Equipment: Tech Monthly May 2026
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Morgan Stanley's May 2026 Semiconductor Production Equipment Tech Monthly highlights diverging trends in equipment spending driven by AI demand versus broader cyclical adjustments. The firm projects total global semiconductor equipment spending to grow approximately 8% year-over-year in 2026. Logic and memory equipment spending are forecast to increase by 10% and 5%, respectively.
The booming demand for AI accelerators continues to fuel capacity expansion at advanced nodes (5nm and below), with related equipment spending expected to surge 15%. In contrast, mature node equipment (28nm and above) faces a 3% spending decline due to sluggish consumer electronics. Within memory, high-bandwidth memory (HBM) and DDR5 demand underpins a 5% spending increase, while NAND equipment spending remains flat.
EUV lithography shipments are projected to reach 45 units in 2026, including 10 high-NA EUV systems. Furthermore, the advanced packaging equipment market is forecast to reach $8 billion, growing 20% driven by chiplet adoption. Geopolitical export controls are expected to reduce China's share of global equipment purchases from 30% in 2025 to 25% in 2026. Meanwhile, global equipment lead times are generally improving, though critical components like lasers and optical systems remain in tight supply. In Q1 2026, global semiconductor equipment shipments reached $25 billion, representing a 2% sequential and 6% year-over-year increase. The report notes potential growth deceleration in H2 2026 contingent on AI demand sustainability.