BofA Lifts US Chip Market Growth Forecast to 18%

Bank of America has revised its outlook for the United States semiconductor industry upward, projecting a total addressable market of $3.2 trillion by 2030. This figure represents a significant increase from the bank's previous estimate of $2.7 trillion, signaling a more aggressive expansion trajectory for the sector. The report indicates that the industry is positioned to nearly double its current size of approximately $1.7 trillion within the next four years.

According to data cited by Investing.com, the bank now anticipates a compound annual growth rate of 18% between 2026 and 2030. This is a marked increase from the prior forecast of 14%. The primary drivers for this accelerated growth are identified as memory chips and data-center components, which continue to see robust customer orders and firm capacity commitments from artificial intelligence and cloud infrastructure providers.

Wafer Equipment Spending Accelerates

Bank of America has also adjusted its forecast for wafer fabrication equipment (WFE) spending, raising the 2026 estimate to $156 billion from $144 billion. This adjustment implies a year-over-year growth rate of 33%. The bank further projects that WFE spending will climb to $210 billion in 2027, up from a previous estimate of $190 billion, before potentially reaching $360 billion by 2030.

The most substantial upgrade in the equipment forecast is seen in the dynamic random-access memory (DRAM) segment. The bank expects equipment spending for DRAM to total $61 billion this year, rising to $85 billion in 2027. This trend aligns with independent industry data; SEMI, which tracks the sector, expects WFE sales to grow by 23.1% to $143.9 billion in 2026, driven by investments in high-bandwidth memory and leading-edge logic nodes.

Memory Demand Outpaces Supply

Market data supports the optimistic outlook for memory components. TrendForce reported that global DRAM industry revenue surged 59.5% sequentially to nearly $154.73 billion in the second quarter. This spike was attributed to strong demand from AI servers for high-capacity and high-bandwidth memory products, while supply expansion has struggled to keep pace with consumption rates.

TrendForce further forecasts that DRAM and NAND Flash will constitute 68% of major cloud service providers' capital expenditure in 2027. This is a significant increase from the 47% share observed in 2026, indicating that memory infrastructure will become a dominant cost center for hyperscalers as they expand AI capabilities.

Sector Performance Remains Strong

These fundamental improvements follow a period of substantial gains for semiconductor equities. The VanEck Semiconductor ETF (SMH) has risen 45% year to date, while the iShares Semiconductor ETF (SOXX) has gained roughly 58%. Other key indices, such as the Invesco PHLX Semiconductor ETF (SOXQ), have jumped 51% over the same period.

The First Trust Nasdaq Semiconductor ETF (FTXL) has also rallied around 62%, reflecting broad investor confidence in the sector's trajectory. These figures, tracked on platforms like Stocktwits, underscore the sustained momentum in the industry despite the high baseline valuations.