---
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/42791653.md"
description: "Morgan Stanley: Semiconductor Production EquipmentMarket Dynamics by Application> Segment Dominance: Logic/Foundry is the largest segment of the Wafer Fab Equipment (WFE) market. Within this segment, TSMC accounts for approximately 30–50% of the market.> Industry Specialization: Among major Japanese equipment makers, companies are typically associated with specific application plays:SCREEN: Primarily a Logic/Foundry play.TEL (Tokyo Electron): Primarily a DRAM-related play.KOKUSAI: Primarily a NAND-related play.Front-End vs. Back-End> Market Split: The semiconductor equipment market is split roughly 9:1 between front-end and back-end equipment.> Trend Rebound: While the back-end equipment share trended downward for over 20 years as front-end tool value-add and unit prices rose, it has recently rebounded due to surging demand in the AI semiconductor market.Competitive Landscape in Key Equipment Segments> Lithography: The market is highly concentrated, with ASML holding a 95% share of the CY25 worldwide lithography equipment market.> Dry Etching: The market for etchers is diverse. Lam Research leads with a 43% share, followed by Tokyo Electron (20%) and AMAT (19%).In Conductor Etch, Lam Research is the dominant player with a 50% share.In Dielectric Etch, Tokyo Electron holds the majority share at 55%.Nvidia Compute Chip Cost Breakdown> Gross Profit: The gross profit margin accounts for 75% of the total cost.  > Frontend Costs: The wafer cost represents 6% of the total.  > Backend Costs: These total 19% of the cost structure, broken down into:  HBM cost: 13%.  Test cost: 3%.  CoWoS cost: 3%ASIC Cost Breakdown> Gross Profit: The gross profit margin is significantly lower at 45% of the total cost.  > Frontend Costs: The wafer cost represents 13% of the total.  > Backend Costs: These total 42% of the cost structure, broken down into:  HBM cost: 24%.  Test cost: 7%.  CoWoS cost: 11%.$NVIDIA(NVDA.US) $Alphabet(GOOGL.US) $Amazon(AMZN.US) $Applied Materials(AMAT.US) $Lam Research(LRCX.US)"
datetime: "2026-07-19T18:46:06.000Z"
locales:
  - [en](https://longbridge.com/en/topics/42791653.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/42791653.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/42791653.md)
author: "[Equity research](https://longbridge.com/en/profiles/2071818324550963200.md)"
---

# Morgan Stanley: Semiconductor Production Equipment…


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