Outlook Supplement - Flipbook - Page 8
Forecast
collectively drive an unusually high
level of uncertainty for 2026.
Just as the COVID-19 pandemic
fueled the 2020 boom and the subsequent 2022 collapse, AI enthusiasm has
powered the 2025 surge. Entering 2026,
the risk of a similar correction cannot
be ignored. If AI demand moderates
and other markets fail to rebound,
today’s primary growth engine could
quickly become tomorrow’s biggest
vulnerability.
AI-driven optimism has pulled
forward forecasts for a US$1 trillion
semiconductor market by three
years, to 2027. We are skeptical of
these projections. Given the industry’s well-established cyclicality,
a downward correction appears inevitable. The current growth profile is
narrow and fragile.
On balance, assuming no major
shocks, we expect the chip market
to grow approximately 12 percent in
2026. What we are far less confident
about is the sign. If AI infrastructure
growth collapses and the global
economy slows, 2026 growth would
be negative 12 percent.
Our overall message is clear: do not
be distracted by headline dollar growth.
Much of today’s strength reflects ASP
expansion rather than fundamental
demand. Cracks are already emerging
in the seemingly insatiable AI LLM
ecosystem and the economic outlook
uncertain. A true, sustainable semiconductor supercycle is unlikely before
2029, and strategic planning should
proceed with extreme caution.
Sunny with a Chance of
Occasional Showers
TIM HEGER, P r e s i d e n t ,
Chamber Solutions Division,
Edwards Vacuum
The current outlook for semiconductor
manufacturing remains positive. We
anticipate steady progress in high-performance sectors – AI, cloud computing, and advanced logic nodes – even
6
as some temporary
softening continues in consumer
electronics and EV
sectors. The surge
in AI investment is
supporting demand
for leading-edge
TIM HEGER
technologies and
contributing to
gradual increases in wafer prices. Data
center expansion to accommodate AI
and cloud computing is expected to
continue over time. Sustainability and
energy efficiency are becoming increasingly important as semiconductor manufacturers work to manage operational
costs and environmental impact. At the
same time, sustainability concerns are
emerging around the power consumed
by semiconductors in use.
As semiconductor manufacturing
processes become more complex,
vacuum and abatement systems are
increasing important for maintaining
process stability, yield, and sustainability. The industry’s focus on energy
efficiency and environmental responsibility aligns with the capabilities of
modern vacuum solutions, making
them critical enablers of future growth.
We also see a growing opportunity in
advanced packaging applications where
the increased complexity of chiplet
architectures and 3D integration are
driving the need for fab-like vacuum
solutions in bonding, stacking, and
encapsulation.
Within Edwards we are focused on:
• Next-Generation Pump & Abatement Innovations – including
new dry pump platforms that offer
significant improvements in footprint, energy efficiency, water
consumption, and nitrogen usage;
new turbomolecular pumps that
deliver higher pumping speeds from
smaller footprints with better energy
efficiency; and next generation
compressors that optimize energy
efficiency in the subfab. Upgrading
| Supplement to January 2026 Semiconductor Digest
abatement systems in our customers’
existing install base delivers greater
total energy savings than focusing
only on new equipment. Retrofits
in legacy fabs drive significant
efficiency and sustainability improvements at scale. This approach
maximizes impact across both new
and established facilities.
• Predictive Maintenance – using AI
driven models and enhanced sensor
data to anticipate maintenance
requirements, synchronize service
procedures with other required
tool maintenance, avoid unplanned
downtime, reduce scrap costs,
and minimize risk of process tool
damage.
• Localized Service Support –
expanding our global network of
service and technology centers for
faster response and lower travel-related carbon footprint; leveraging
local knowledge and established
relationships to promote equipment
upgrades that reduce carbon footprint, especially in legacy fabs, the
largest portion of our installed base.
• OEM Partnerships – collaborating closely with leading equipment
makers and emerging players where
co-development ensures optimized
performance, energy efficiency, and
environmental compliance.
• Sustainability – A significant share
of the total energy usage in a fab is
consumed by our products in the
subfab. Clearly, improvements in
energy efficiency there can have
a significant impact on the total.
Moreover, this is one of those happy
circumstances where environmental and economic drivers align.
Improvements in energy efficiency
reduce both emissions from purchased power and the operating cost
of those purchases.
Less direct but potentially far more
significant are reductions in Scope 3
emissions from power consumed by
vacuum and abatement systems in use.
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