Dramatic Changes in the Global Semiconductor Equipment Market by 2026: New Rules of the Game Driven by AI Chip Manufacturing Competition and Geopolitical Risks
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Paradigm Shift in the Semiconductor Equipment Market Driven by the AI Revolution
As of 2026, the global semiconductor equipment market is undergoing unprecedented changes at the heart of the AI revolution. According to the latest report by market research firm Gartner, the global semiconductor equipment market is expected to reach $115 billion in 2026, marking an 18.3% increase from the previous year. The demand for advanced process equipment is particularly surging, with the EUV (Extreme Ultraviolet) lithography equipment market for processes below 7nm alone forming a $35 billion market. The explosive spread of large language models (LLMs) and generative AI services like ChatGPT, Claude, and Gemini is the key driver of this growth.
ASML, headquartered in Veldhoven, Netherlands, has emerged as the biggest beneficiary of these changes. The company’s EUV equipment is currently the only technology in the world enabling advanced processes below 3nm, recording a 42% increase in sales to €8.7 billion in Q4 2025 compared to the same period the previous year. ASML CEO Christophe Fouquet recently projected in an earnings announcement that “the demand for AI chips will sustain annual growth of over 20% for the next three years.” Particularly, as Taiwan’s TSMC and South Korea’s Samsung Electronics and SK Hynix accelerate the adoption of EUV equipment to expand AI memory and logic chip production, ASML’s order backlog reached €45 billion as of January 2026.
Applied Materials, headquartered in Santa Clara, California, has also positioned itself as a key player in the AI chip manufacturing boom. The company’s annual revenue for 2025 was $28.7 billion, a 24% increase from the previous year, showing strength particularly in the atomic layer deposition (ALD) and chemical vapor deposition (CVD) equipment sectors. Applied Materials’ foundry and logic division is expanding its market share by supplying key equipment for the 3nm and 2nm process lines of TSMC, Intel, and Samsung Foundry. The company’s CTO Omid Naramsu emphasized the importance of technological differentiation, stating, “The complex 3D structures and ultra-fine patterning of AI chips require deposition technology that is more than three times as precise as existing technologies.”
The Rise of South Korea’s Semiconductor Equipment Industry and Its Enhanced Global Competitiveness
South Korea’s semiconductor equipment industry has significantly strengthened its position in the global market by 2026. The domestic semiconductor equipment market size was approximately 28 trillion won in 2025, accounting for 24% of the global market, second only to China (32%). This result is driven by massive facility investments from Samsung Electronics and SK Hynix, with the two companies investing a combined 65 trillion won in facilities in 2025, further solidifying their technological dominance in the global memory market.
Wonik IPS, headquartered in Hwaseong, Gyeonggi Province, has emerged as a leading player in South Korea’s semiconductor equipment industry. The company achieved annual sales of 2.34 trillion won in 2025, marking a 31% growth from the previous year. Particularly, Wonik IPS’s plasma-enhanced chemical vapor deposition (PECVD) equipment plays a crucial role in Samsung Electronics’ 3D NAND flash memory production and is now being supplied in large quantities to SK Hynix’s HBM (High Bandwidth Memory) production lines. Wonik IPS has also increased its overseas sales ratio to 45% by expanding its global customer base, including China’s YMTC and Japan’s Kioxia.
PSK is experiencing rapid growth based on its unrivaled technology in the wafer inspection and metrology equipment sector. The company’s 2025 sales were 890 billion won, a 28% increase from the previous year, showing strength particularly in the defect detection equipment sector essential for AI chip manufacturing. PSK’s optical inspection equipment can detect micro-defects as small as tens of nanometers in the 3nm process, receiving large orders from TSMC and Samsung Foundry. The company announced plans to expand its local service center in Taiwan and establish a new R&D center in Texas, USA, in the first half of 2026.
The growth of South Korea’s semiconductor equipment industry is closely related to the government’s K-Semiconductor Belt project. According to the Ministry of Trade, Industry and Energy, a total of 622 trillion won in public-private joint investment will be made from 2022 to 2031, with equipment-related investments alone amounting to approximately 180 trillion won. Particularly, the construction of a semiconductor cluster connecting Yongin, Pyeongtaek, and Cheonan is accelerating the establishment of local supply chains and technological cooperation among equipment companies. Samsung Electronics announced plans to increase the proportion of domestic equipment from 15% to 25% during the expansion of its Pyeongtaek campus, which is expected to result in an annual increase of approximately 8 trillion won in sales for domestic equipment companies.
In the memory semiconductor field, South Korean companies’ technological superiority is becoming more solid. Samsung Electronics began mass production of the world’s first 3D NAND flash memory with over 300 layers at the end of 2025, developing new etching and deposition technologies for this purpose. The company’s semiconductor division sales were 74 trillion won in 2025, an 18% increase from the previous year, with facility investments amounting to 28 trillion won. SK Hynix also achieved a 60% global market share in HBM3E memory for AI accelerators, recording annual sales of 42 trillion won in 2025. Particularly, the HBM memory exclusively supplied to NVIDIA’s H200, B200 GPUs and AMD’s MI300 series generates high added value of $1,200 per unit.
Despite this growth, South Korea’s semiconductor equipment industry faces several challenges. The biggest issue is the high dependency on overseas core technologies. According to an analysis by the National Science and Technology Research Council, the localization rate of core components for domestic semiconductor equipment companies averages only 42%, with over 80% reliance on imports for lasers, sensors, and precision control systems. This could pose a significant vulnerability in the event of global supply chain instability or geopolitical risks.
Additionally, the shortage of skilled personnel is a serious issue. According to a survey by the Korea Semiconductor Industry Association, the domestic semiconductor equipment industry currently lacks about 12,000 specialized personnel, with a particularly severe shortage of process engineers and equipment design experts. To address this, the government plans to expand a semiconductor-specialized talent development program to train 3,000 individuals annually starting in 2026 and enhance visa simplification and tax benefits to attract outstanding overseas talent.
From a geopolitical perspective, the US-China technological supremacy competition is having a complex impact on South Korea’s semiconductor equipment industry. The US’s strengthened export controls on semiconductors to China are limiting the export of high-specification equipment to China, causing some companies to experience revenue declines. On the other hand, the increase in facility investments due to China’s policy to enhance semiconductor self-sufficiency presents new opportunities. Industry insiders analyze that “although uncertainty in the Chinese market is increasing, the growing demand in emerging markets such as Southeast Asia and India is offsetting this to a significant extent.”
In terms of future prospects, South Korea’s semiconductor equipment industry is expected to sustain an average annual growth of over 15% from 2026 to 2030. Opportunities are expected to expand particularly in new technology fields such as AI chips, semiconductors for autonomous vehicles, and next-generation memory like MRAM (Magnetoresistive RAM) and ReRAM (Resistive RAM). Additionally, the increase in demand for eco-friendly equipment due to carbon neutrality policies, process automation, and the establishment of AI-based smart factories are expected to act as new growth drivers. The industry is focusing on expanding R&D investments and enhancing technological competitiveness through strengthened global partnerships to leverage these opportunities.
*The content of this article is intended for general informational purposes and is not a solicitation for investment or stock recommendations. Investment decisions should be made at the discretion and responsibility of the individual.*
