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On Monday, Berenberg, a financial services firm, maintained a cautiously optimistic outlook for capital expenditure (capex) in the semiconductor sector. In their latest assessment, Berenberg analysts predict a modest growth in spending on wafer fab equipment (WFE), expecting an increase of 3% in 2025 and 4% in 2026. This forecast remains largely consistent with their January projections, despite initial concerns earlier in April regarding the potential impacts of US tariffs and AI diffusion rules on the semiconductor industry’s end-markets. Leading chip designer Marvell (NASDAQ:MRVL) Technology, with its $55 billion market capitalization, exemplifies the sector’s volatility with a beta of 1.82, indicating higher sensitivity to market movements than average.
The analysts anticipate that TSMC, a leading semiconductor manufacturer, will expand its 2nm production capabilities at two of its fabrication plants, Fab 20 and Fab 22, which are primarily dedicated to serving Apple (NASDAQ:AAPL). Additionally, Berenberg suggests that TSMC’s expansion efforts in the United States are on track. They note a potential increase in production capacity at TSMC’s Fab 21, with the first two phases possibly ramping up to 35,000 wafer starts per month, up from the initially planned 30,000. According to InvestingPro data, this expansion aligns with broader industry growth expectations, as seen in Marvell Technology’s projected 42% revenue growth for FY2026.
Despite the positive outlook for TSMC, Berenberg expects other industry giants, Intel (NASDAQ:INTC) and Samsung (KS:005930), to reduce their capital expenditure year-over-year in 2025 and 2026. The report does not elaborate on the specific reasons behind the anticipated reduction in spending by these companies. For investors seeking deeper insights into semiconductor companies’ financial health and growth prospects, InvestingPro offers comprehensive analysis and over 10 additional ProTips for Marvell Technology alone, helping navigate this complex sector.
The semiconductor industry is critical for the production of a wide range of electronic devices, and capital expenditure is a key indicator of future production capabilities and technological advancements. The sector has been facing various challenges, including supply chain disruptions and geopolitical tensions, which have prompted concerns about future growth and investment.
Berenberg’s update provides an insight into the expected trends in the semiconductor industry’s investment patterns, highlighting the differing strategies of major players in the field. The firm’s analysis is based on current market conditions and industry developments, and it will continue to monitor the sector for any significant changes that may arise.
In other recent news, Marvell Technology has refined its revenue forecast for the first quarter of fiscal year 2026, projecting net revenue around $1.875 billion, with a tightened guidance range of plus or minus 2%. This adjustment reflects a more precise expectation compared to the previous range of plus or minus 5%. The company also announced the postponement of its Investor Day, initially set for June 2025, to an unspecified date in 2026 due to macroeconomic conditions. Meanwhile, Stifel analysts have maintained a Buy rating on Marvell, reiterating a $80 price target, following the company’s announcement of a webinar to showcase its custom AI infrastructure ASIC business. Additionally, Morgan Stanley (NYSE:MS) has kept its Equalweight rating and $90 price target, addressing concerns about Marvell’s business prospects related to its custom silicon AI customers. Marvell has also successfully integrated its Structera Compute Express Link devices with processors from AMD (NASDAQ:AMD) and Intel, enhancing memory performance for cloud data centers. Furthermore, changes in Marvell’s board leadership were announced, with Brad Buss set to become the new Lead Independent (LON:IOG) Director, succeeding Michael Strachan and Robert Switz.
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