Bernstein: Semiconductor equipment doesn’t follow storage—history has proven it twice

Deep Tide TechFlow message, according to ChaoXiang Research, a July 13 report from Bernstein stated that since June 2025, the memory sector has cumulatively outperformed semiconductor equipment by 661 percentage points. The market has since raised a common concern: if memory pulls back, will equipment fall along with it? Bernstein answered the question using data from a decade of history.

Equipment and memory are not tightly linked; their long-term correlation has remained at low levels, and equipment has twice managed to move independently when memory weakened.

Both periods of divergence lasted about two years, during which equipment significantly outperformed. From 2019 to mid-2025, memory lagged equipment for as long as six years, only to catch up in February 2026 at the level of a 36 times cumulative increase over 15 years. After that, memory accelerated its rise, with excess returns accumulating to extreme levels.

If mean reversion occurs, equipment may gain relative returns. SK hynix has already announced a $67 billion capacity expansion plan, and equipment orders are a form of certain revenue. Bernstein has rated Applied Materials AMAT, Lam Research LRCX, and ASML as Outperform, with target prices of $525, $340, and €2,300, respectively.