Are the Fab 5 wafer fab equipment companies — ASML, Applied Materials, Lam Research, Tokyo Electron, and KLA Corp — still worth buying at today&#x27;s valuations? CSI breaks down 20 years of revenue data across the five companies that control roughly 70% of annual global fab equipment spending, and explain why 2026 and 2027 are shaping up to be record revenue years — with a potential speed bump in 2028 worth watching. The conversation also covers the wave of creative M&amp;A reshaping the equipment landscape: the Axcelis and Veeco merger nearing final approval, Onto Innovation&#x27;s strategic equity stake in X-ray imaging firm Rigaku, and Applied Materials&#x27; targeted acquisition of an advanced packaging segment from ASMPT. But the most overlooked part of this episode is the introduction of the Lab 7 — a group of life science and laboratory capital equipment companies, including Thermo Fisher, Agilent, Bruker, and Revvity, that share surprising structural overlap with semiconductor supply chain investing. CSI explains why these companies could serve as a diversification play for semiconductor-heavy portfolios, and why the two industries may begin to converge. If you&#x27;re wondering how to stay invested in the semiconductor supply chain without overconcentrating in a handful of names, this episode gives you a research-backed framework for thinking about it. Topics covered: - Fab 5 revenue breakdown and 20-year performance - Is wafer fab equipment overpriced in 2026? - Axcelis + Veeco merger update - Onto Innovation &amp; Rigaku X-ray partnership - Applied Materials acquires ASMPT packaging segment - Introducing the Lab 7: life science meets semiconductor - Portfolio diversification beyond the semiconductor supply chain - Semiconductor market cycle outlook through 2028 and beyond For in-depth stock research and the Semiconductor Insider membership, visit chipstockinvestor.com. Use fiscal.ai/csi for 15% off any paid plan.

Wafer Fab Equipment, M&A Moves & The Lab 7 You've Never Heard Of

Chip Stock Investor Podcast

# Full Transcript

**Podcast:** Chip Stock Investor Podcast

## Participants

- **Nicholas Rossolillo** (Chip Stock Investor)
- **Kasey Rossolillo** (Chip Stock Investor)

## Transcript

Sponsor of today's video is Fiscal.ai. Of course, we use fiscal data in all of our videos and over on chipstockinvestor.com and you can get 15% off of any paid plan with our unique link, Fiscal.ai. forward slash CSI. We'll use a couple charts from fiscal today. Stay tuned. You'll see some like this

one right here, comparing the revenue breakdown of the Fab Five. We call them the Fab Five, ASML, Applied Materials, LAM Research, Tokyo Electron and KLA Corp. We'll break it down and what happened to make this a thing over the course of the last 20 years. And more importantly, what's happening right now in the world of Wait for Fab Equipment. That's fiscal.ai forward slash CSI. Check it out in the description

below. It feels like we haven't talked about the Fab Equipment Choke Point and the semiconductor industry flow for a while in general. We've talked about a few specific companies, especially LAM Research just recently, but one of the reasons we haven't been talking about it as a general whole is that there's a lot of worry that maybe these companies are too expensive. And maybe that's the case, but where could

an investor diversify their portfolio if not into companies like these at the choke point of the semiconductor industry? There's another industry with a lot of overlap with Fab Equipment. Tell me, tell me more. Oh, you're not going to tell me more. Not yet. And when we're talking about Fab Equipment, this is primarily the area that we're talking about in the semiconductor manufacturing process. Are these companies overpriced in general?

And how can we diversify if you find yourself with too much exposure to these? This is interesting because there is still a lot of merger and acquisition activity going on right now. So maybe things are not completely outrageously overpriced yet. This is the dynamics for the Excelis plus Vico merger. They're in the final approval stages. They're just waiting on approval from China. Second half of 2026. So possibly in just a few months, this is done.

Now, even with these companies combined, they're not going to be ranking in the Fab Five. It's not going to be that type of company. Especially because this is 2024 revenue. By the time they merge, it's going to be more like one and a half billion in sales, not 1.7 billion. And we did call out Excelis being a potentially cheap company a few times last year. It's not cheap anymore, but you might want to hold if you already own it. It'd be a nice diversified company.

So we're still talking about mergers and acquisitions. Here's another interesting one that we want to point out. On to innovation and Regaku. What is Regaku? X-ray imaging, but not like an X-ray for people. If you have a broken arm or whatever, not that type of X-ray. This is more like industrial X-ray imaging, i...

Wafer Fab Equipment, M&A Moves & The Lab 7 You've Never Heard Of

Transcript

Built for investment professionals

Every day you wait, your competitors are finding
edge in conversations you're not hearing.

Wafer Fab Equipment, M&A Moves & The Lab 7 You've Never Heard Of

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.