AMA

Needham: WFE Spending

> Estimates Raised: Needham has increased its adjusted WFE spending estimates for the years 2026, 2027, and 2028;

2026: Adjusted WFE is now estimated at $145.3B (up from $130.1B).

2027: Adjusted WFE is now estimated at $201.0B (up from $149.6B).

2028: New CY28 WFE forecast introduced at $191.6B. Growth Drivers: The upgrades are primarily driven by accelerating DRAM and NAND spending, alongside faster-than-expected growth in leading-edge foundry/logic.

> CY28 Outlook: The forecast for 2028 reflects a "pause in growth" following two years of expansion, with memory spending—specifically DRAM—expected to moderate.

Key Segment Insights

> Foundry/Logic: Spending has strengthened, particularly at leading-edge nodes. For 2027, Needham expects leading-edge growth of approximately 30% year-over-year.

> DRAM: Described as "the true AI bottleneck," DRAM WFE for 2027 is now modeled at $84.1B, a 72% increase from the previous estimate of $49.0B.

> NAND: While pricing has been volatile, long-term bit growth driven by AI is expected to remain in the mid-20s to 30% range.

$KLA(KLAC.US) $Lam Research(LRCX.US) $Applied Materials(AMAT.US)