Where Every $100 of Chipmaking Equipment Spending Goes

A chip is not made in one step. A wafer passes through hundreds of cycles of adding thin films, patterning them, removing material, cleaning the surface and measuring the result, layer after layer. A lithography machine, however famous, is one station in a much larger manufacturing system.

That raises a simple question with financial consequences: when chipmakers spend on wafer-fabrication equipment, which processes receive the money?

This article answers it by normalising the global market to $100. The figure is a way of reading a market mix. It is not a factory budget, and it is not the cost of producing one chip.

Where the boundary sits

Equipment statistics depend on where the line is drawn. Wafer-fab equipment (WFE) covers the machines that process the wafer itself, including the steps that build the metal wiring on top of the transistors. Assembly and packaging equipment cuts, bonds and encloses finished dies. Test equipment checks that chips work. Beyond all three sit factory construction, cleanroom utilities, materials and outside services.

Equipment-market revenue is therefore not the same as the cost of building a fab, nor the same as a chipmaker’s full capital-expenditure budget. A large share of a new fab’s cost is the building, power, water and gas systems around the tools.

One common confusion is worth avoiding. Front-end-of-line and back-end-of-line are both stages of wafer processing: the back end builds the wiring on the wafer. Neither term means packaging.

Where $100 of wafer-fab spending goes

Morningstar’s analysis, using Gartner data, splits 2024 WFE spending into eight categories that sum to 100%. Three dominate. Lithography accounted for 24.6%, etch for 23.7% and deposition for 22.6%. Process control, the measurement and inspection tools, took 12.0%. Cleaning, chemical-mechanical planarization (CMP) and ion implantation followed with 6.3%, 2.8% and 2.2%, and the remaining 5.8% falls into other categories in the source classification.

Select a category in the chart, or in the list beneath it, to see what the process does, which companies supply it and what tends to drive demand. The table gives the exact figures.

What each process does

Deposition lays down films only a few atoms to a few hundred atoms thick: insulators that separate wires, metals that carry current and semiconductor layers that form transistors. Lithography then projects a circuit pattern onto a light-sensitive coating called resist. Etch uses that pattern as a stencil, removing material only where the resist has been cleared. Cleaning strips the residues each step leaves behind, because a single particle can ruin a die.

Process control sits between these steps. Inspection tools look for defects; metrology tools measure dimensions, thicknesses and alignment. Their value lies in catching problems early, before a faulty wafer collects more expensive processing.

Two processes appear less often but remain essential. Ion implantation fires dopant atoms into selected regions to change how silicon conducts. CMP polishes the wafer flat so that the next layer can be patterned accurately.

How the processes work together

The sequence is better described as a loop than a line. A typical layer might be deposited, patterned, etched, cleaned and inspected, and then the loop begins again for the next layer. Implantation and CMP are inserted where the design calls for them. The diagram is simplified: real flows vary by product and by fab, and many steps recur several times within a single layer.

Who sells what

A small group of companies covers most of these categories, and several appear in more than one. ASML, based in the Netherlands, supplies lithography systems and is the only supplier of extreme-ultraviolet (EUV) scanners. ASM International, also Dutch but an entirely separate company, specialises in deposition, notably atomic layer deposition and epitaxy. Applied Materials has the broadest portfolio, spanning deposition, etch, process control, CMP and implantation. Lam Research is strongest in etch and deposition. Tokyo Electron supplies etch, deposition, cleaning and the coater/developer tracks that work alongside lithography scanners. KLA focuses on process control.

Specialists matter in the smaller categories: SCREEN in cleaning, Ebara in CMP and Axcelis in ion implantation, while Canon and Nikon supply lithography tools mainly outside EUV.

The matrix shows where companies have products, not how much they sell. Market shares for individual companies require their own data, which this article does not estimate.

From wafer processing to the whole equipment market

According to SEMI’s mid-year forecast, published on 14 July 2026, global sales of semiconductor manufacturing equipment are expected to reach $165.9 billion in 2026. Wafer-fab equipment accounts for $143.9 billion of that total, test equipment for $15.3 billion and assembly and packaging equipment for $6.7 billion. SEMI also forecasts a total of $229.5 billion for 2028.

These are forecasts, not reported results, and they come from a different organisation with its own market definitions. Applying Gartner’s 2024 percentages to SEMI’s 2026 total would create figures that look measured but are not, so we do not do it. The two sources describe related markets; their totals are not forced to match.

The investment question

Knowing where the money goes is only the start. A company can be essential to a process and still struggle to earn attractive returns, while another with a smaller slice can benefit from a large installed base and recurring service work.

The next question is economic: how does a supplier turn participation in an essential process into durable revenue and profit? Our companion article, Beyond the Machine Sale: Who Captures the Next Wave of Equipment Spending?, takes it up.