Expansion cannot stop! Citigroup: Capital expenditures of the three giants Samsung, Taiwan Semiconductor, and Intel will have positive guidance

Citi expects that the upcoming 2026 capital expenditure guidance from the three semiconductor giants, TSMC, Samsung, and Intel, will show a positive trend, injecting strong momentum into the global wafer fab equipment (WFE) market. The bank maintains its judgment that the semiconductor equipment industry is in the second phase of an upward cycle and believes that global WFE spending in 2026 is heading towards USD 126 billion under its optimistic scenario, higher than the baseline forecast of USD 115 billion.

According to the Wind Trading Desk, Citi pointed out in a research report released on January 5 that it expects TSMC to set its 2026 capital expenditure guidance in the range of USD 46 billion to USD 48 billion, Intel's capital expenditure will stabilize, while Samsung may follow Micron's expansion pace to increase investment. The three companies together account for about 59% of Citi's global WFE spending model for 2026, and their capital expenditure trends are a barometer for the entire semiconductor equipment supply chain.

Citi analyst Atif Malik stated in the report that the higher levels of capital expenditure from the three giants will be associated with greater growth opportunities. The bank's baseline model assumes that NAND flash memory chip equipment spending will grow by 30% in 2026, DRAM by 12%, and front-end logic chips by 6%.

TSMC: Capital Expenditure May Reach USD 47 Billion, with Upside Potential for the Year

Citi expects TSMC to set its 2026 capital expenditure guidance in the range of USD 46 billion to USD 48 billion in its earnings report to be released before the U.S. market opens on January 15, and may further raise it during the year. The bank's own model predicts TSMC's 2026 capital expenditure to be USD 47 billion, with additional upside potential.

According to Citi's communication with investors, the market expectation for TSMC's 2026 capital expenditure is about USD 50 billion. This expectation is higher than Citi's initial forecast range, indicating that the market holds an optimistic view on TSMC's expansion efforts.

In the earnings call last October, TSMC narrowed its 2025 capital expenditure range from the previous USD 38 billion to USD 42 billion to USD 40 billion to USD 42 billion. Management stated at that time that higher levels of capital expenditure have always been associated with greater growth opportunities, laying the groundwork for further increasing investment in 2026.

Intel: Capital Expenditure Will Stabilize, Supported by Improvements in Backend Customer Pipeline

Citi expects Intel's 2026 capital expenditure to stabilize, mainly benefiting from improvements in its foundry business, particularly in the backend customer pipeline. The bank's model shows Intel's capital expenditures for 2025 and 2026 to be USD 18 billion and USD 15 billion, respectively, while market expectations (FactSet data) are USD 17 billion and USD 16 billion.

Intel is expected to announce its earnings report after the U.S. market closes on January 22. The company maintained its guidance for total capital expenditure of USD 18 billion for 2025 during its earnings call last October and expects capital expenditure for 2026 to be around USD 16 billion.

Citi's forecast indicates that although Intel's capital expenditure in 2026 will decline compared to 2025, the level of capital expenditure will stabilize rather than continue to decline sharply, supported by improvements in the foundry business customer pipeline, especially the growth of backend packaging business. This is a positive signal for Intel, which is advancing its IDM 2.0 strategy and transforming its foundry business

Samsung: There is room for upward adjustment in capital expenditure, Micron's significant increase in investment provides a reference

Citigroup believes that Samsung's capital expenditure in 2026 has room for upward adjustment, mainly based on the fact that its competitor Micron has significantly raised its capital expenditure guidance. Samsung is expected to announce its financial results after the U.S. stock market closes on January 29, but the company typically does not provide specific capital expenditure guidance during its earnings call.

However, Samsung's management previously stated that the company maintains a flexible attitude towards capital expenditure in 2026 and will increase investment as needed based on the growth in AI demand. This statement leaves room for an upward adjustment in capital expenditure.

Citigroup specifically pointed out that during Micron's earnings call in December 2025, it raised its net capital expenditure for fiscal year 2026 (ending August 2026) from the previous $18 billion to $20 billion, a year-on-year increase of 45%, with construction capital expenditure nearly doubling. Micron also stated that capital expenditure for fiscal year 2027 will continue to grow.

As a direct competitor to Samsung in the memory chip market, Micron's significant expansion measures may prompt Samsung to take corresponding actions to maintain its market position. Citigroup believes that Samsung's capital expenditure decisions will align with Micron's statements