US Semiconductors — State of the Union: raising estimates, industry TAM doubling to $3.2tn CY30

We reiterate our thesis of the AI industry moving to addressing structural and physical (chips, power) constraints, from having to defend return-on-investment before. Memory chip shortages and price inflation remain a critical lever behind industry growth upside but we note a brighter outlook for AI/servers as well. We raise our CY30E total semis industry TAM estimate to $3.2Tn, or +18% CAGR between CY26-30E, from $2.7Tn/+14% CAGR prior, led mostly by growth in memory/data center, and also incrementally by higher recovery in auto/industrial. We raise our WFE estimates: new CY26 WFE is $156bn (+33% YoY), CY27 moves to $210bn (+34% YoY), and the industry could expand towards $360bn WFE by CY30. Data Center/AI still the brightest area in semis — we see no signs of slowing in customer orders, LTAs, capacity commitments, or semis pricing. Despite a 67% YTD gain in the SOX, semis still screen attractively relative to growth, trading at 18x NTM PE, below SPX's 19x despite 139% YoY EPS growth.