BofA raises US semiconductor industry outlook to 18% annual growth

Investing.com -- Bank of America has increased its growth forecast for the US semiconductor industry to an 18% compound annual growth rate between 2026 and 2030, up from its previous estimate of 14%. The revision reflects stronger expectations for memory chips and server components.

The bank now projects the total semiconductor industry total addressable market will reach $3.2 trillion by 2030, compared to its earlier estimate of $2.7 trillion. Memory and data center segments are expected to drive most of the growth, with additional contributions from recovery in automotive and industrial sectors.

The semiconductor industry, which took 50 years to reach $1 trillion in sales, is now expected to double its current $1.7 trillion market size within four years, according to the report.

Bank of America also raised its wafer fabrication equipment estimates, projecting $156 billion for 2026, up from $144 billion, representing a 33% year-over-year increase. The 2027 forecast moved to $210 billion from $190 billion, a 34% annual gain. The increase is largely attributed to higher memory equipment demand, particularly for DRAM chips.

For DRAM specifically, the bank expects equipment spending to reach $61 billion in 2026 and $85 billion in 2027. By 2030, the wafer fabrication equipment market could expand to $360 billion, representing a 23% compound annual growth rate between 2026 and 2030.

Bank of America cited continued strong customer orders and capacity commitments in the data center and artificial intelligence sectors. Memory pricing has remained stable week-over-week for both DRAM and NAND chips. GPU rental pricing for Nvidia's (NASDAQ: NVDA) B200 stands at $5.72 per hour, less than 10% below the March peak of around $6.10.

The Philadelphia Semiconductor Index has gained 67% year-to-date. The semiconductor group trades at 18 times next twelve months price-to-earnings ratio, below the S&P 500's 19 times multiple.

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