Semiconductor Sector Seeing Rising Wafer Fab Equipment Market 2028 Growth Projections, Morgan Stanley Says

The wafer fab equipment, or WFE, market's 2028 growth expectations have risen "significantly," with estimates reaching about $250 billion recently as the market is on track to hit $200 billion in 2027, Morgan Stanley said in a Monday note. The market's expanding leading-edge customers are expected to benefit KLA Corp. (KLAC) and dynamic random-access memory WFE growth in 2026 should serve as a tailwind for Applied Materials (AMAT), the brokerage said. Meanwhile, MKS (MKSI) and Onto Innovation (ONTO) both present "substantial upside" from underappreciated 2027 earnings, the investment firm added. Morgan Stanley raised its WFE projections to $202 billion from $191 billion in 2027, and to $227 billion from $215 billion in 2028, according to the note. The brokerage noted that it is "not yet ready" to reflect the $250 billion forecast in its models, citing the expected supply growth and other factors. Morgan Stanley raised its price targets on KLA to $274 from $190; on Applied Materials to $647 from $502; and MKS to $442 from $374. Price: $599.23, Change: $-3.81, Percent Change: -0.63%