BofA lists top 5 themes driving next $1tn in incremental semi sales

Investing.com -- Artificial intelligence is set to compress into five years what took the chip industry half a century to achieve, according to Bank of America analysts, who identified five key forces they believe will drive the next $1 trillion in semiconductor sales.

"The chip industry took ~50 years to generate its first $1Tn in sales," the team led by Vivek Arya said in a note. "We expect AI to help add another $1Tn in just the next five years."

The bank’s five themes are AI data center systems, whose total addressable market it sees growing to roughly $1.7 trillion by 2030 from $273 billion in 2025; memory strength and durability underpinned by long-term supply agreements; semiconductor capital equipment and reshoring benefiting from rising chip complexity; analog chips gaining from surging AI power requirements; and agentic CPU demand, which BofA estimates represents a $170 billion server opportunity across x86 and ARM architectures.

Alongside the thematic update, BofA raised its total semiconductor industry forecast to $2.7 trillion by 2030, implying a 28% compound annual growth rate from 2025, up from a prior estimate of $2.3 trillion. The analysts see memory as the dominant, with BofA projecting nearly 300% year-on-year growth in 2026 alone.

The bank also materially lifted its wafer fab equipment (WFE) forecasts, now seeing spending reach $250 billion by 2028, up from a prior estimate of $203 billion, and potentially hitting $292 billion by 2030.

Alongside the updated forecasts, BofA made several stock-specific price target changes. The most notable was Micron, where analysts raised their target to $1,500 from $950, citing robust high-bandwidth memory demand and structurally constrained supply through 2028.

Applied Materials went to $720 from $540, Lam Research to $480 from $330, and KLA Corporation to $317 from $210, all on higher wafer fab equipment forecasts. Marvell was lifted to $365 from $240 on strong AI connectivity demand, while Intel’s target moved to $160 from $135 on expanding server CPU and foundry opportunities.

Credo Technology’s target rose to $340 from $252.

The one exception to the broadly bullish tone was Axcelis Technologies, where BofA raised its target to $156 from $130 but kept an Underperform rating, saying the stock already looks fully valued even accounting for the potential earnings uplift from its pending merger with Veeco.

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