Citigroup anticipates that the forthcoming 2026 capital expenditure guidance from the semiconductor triumvirate—Taiwan Semiconductor Manufacturing (TSM), Samsung, and Intel (INTC)—will present a positive outlook, which is expected to inject robust momentum into the global wafer fab equipment (WFE) market. The firm maintains its view that the semiconductor equipment industry is in the second phase of an upward cycle and believes that 2026 global WFE spending is progressing towards its optimistic scenario of $126 billion, surpassing the baseline forecast of $115 billion.
According to the analysis, a Citigroup research report released on January 5th indicated that TSMC is expected to set its 2026 capital expenditure guidance in the range of $46 to $48 billion, Intel's capital expenditure is projected to stabilize, while Samsung may follow Micron's lead in increasing production capacity by raising its investments. Collectively, these three companies account for approximately 59% of Citigroup's 2026 global WFE expenditure model, making their capital expenditure trends a significant bellwether for the entire semiconductor equipment industry chain.
Citigroup analyst Atif Malik stated in the report that higher capital expenditure levels from the three giants will be associated with greater growth opportunities. The firm's baseline model assumes a 30% growth in NAND memory chip equipment spending, a 12% increase for DRAM, and 6% growth for front-end logic chips in 2026.
Citigroup expects TSMC to announce its 2026 capital expenditure guidance in the range of $46 to $48 billion during its earnings report before the U.S. market opens on January 15th, with potential for further upward revision within the year. The firm's own model predicts TSMC's 2026 capital expenditure at $47 billion, with additional upside potential.
Based on Citigroup's communications with investors, market expectations for TSMC's 2026 capital expenditure are approximately $50 billion. This expectation, which is higher than Citigroup's initial forecast range, indicates market optimism regarding TSMC's production expansion efforts.
During its earnings call last October, TSMC had already narrowed its 2025 capital expenditure range from the previous $38-$42 billion to $40-$42 billion. Management stated at the time that higher levels of capital expenditure are always linked to greater growth opportunities, laying the groundwork for a further increase in investment scale for 2026.
Citigroup expects Intel's 2026 capital expenditure to stabilize, primarily benefiting from improvements in its foundry business, particularly the backend customer pipeline. The firm's model shows Intel's capital expenditure at $18 billion for 2025 and $15 billion for 2026, while market expectations (FactSet data) are $17 billion and $16 billion, respectively.
Intel is scheduled to report earnings after the U.S. market closes on January 22nd. The company maintained its guidance for total 2025 capital expenditure at $18 billion during its October earnings call and projected 2026 capital expenditure to be approximately $16 billion.
Citigroup's forecast suggests that although Intel's 2026 capital expenditure shows a decline compared to 2025, the level is expected to stabilize rather than continue a sharp descent, supported by improvements in the foundry business customer pipeline, particularly growth in backend packaging operations. This is a positive signal for Intel as it advances its IDM 2.0 strategy and foundry business transformation.
Citigroup believes there is potential for Samsung's 2026 capital expenditure to be revised upwards, primarily based on competitor Micron's significant increase in its capital expenditure guidance. Samsung is expected to report earnings after the U.S. market closes on January 29th, but the company typically does not provide specific capital expenditure guidance during its earnings calls.
However, Samsung management has previously stated that the company maintains a flexible stance towards 2026 capital expenditure and will increase investments as needed based on the growth of AI demand. This statement leaves room for a potential upward revision in capital expenditure.
Citigroup specifically highlighted that Micron, during its December 2025 earnings call, raised its net capital expenditure for fiscal year 2026 (ending August 2026) from the previous $18 billion to $20 billion, a 45% year-over-year increase, with construction capital expenditure nearly doubling. Micron also indicated that capital expenditure for fiscal year 2027 would continue to grow.
As a direct competitor to Samsung in the memory chip market, Micron's substantial production expansion moves may prompt Samsung to take corresponding action to maintain its market position. Citigroup believes Samsung's capital expenditure decisions will align with the signals from Micron.