Semi Equipment & EDA
The Machines and Software That Build Every Chip | Updated April 2026
Where Semi Equipment & EDA Sits in the Supply Chain
EDA tools (bottom) design chips. Equipment (second layer) builds them. These companies are the foundation of the entire semiconductor industry.
The Problem
Making a modern chip requires printing patterns smaller than a virus onto silicon wafers using light. The machines that do this cost $200M+ each, and only one company in the world can make them.
The Solution
Equipment companies build the machines (lithography, etching, deposition) that manufacture chips. EDA companies make the software that engineers use to design chips before they’re built. Without either, no chip gets made.
Why It Matters Now
The AI boom is driving the largest fab construction cycle in semiconductor history. TSMC, Intel, and Samsung are all building new fabs simultaneously, and every fab needs billions in equipment. EDA benefits from every new chip design.
AMAT
Applied Materials
Largest semiconductor equipment maker. Deposition, etching, and inspection tools used in every fab worldwide.
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ASML
ASML Holdings
Monopoly on EUV lithography machines — the only way to print sub-7nm chip patterns. No EUV, no leading-edge chips.
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CDNS
Cadence Design Systems
EDA software for chip design and verification. Every chip designed by NVIDIA, Apple, or Qualcomm uses Cadence tools.
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ENTG
Entegris
Pure-play semi materials & consumables — CMP slurries, filtration, FOUPs, etch chemistries. 75% unit-driven (MSI), 25% CapEx-driven; 100% semi-cycle exposed.
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KLAC
KLA Corporation
Inspection and metrology equipment. Finds defects on chips during manufacturing. Critical for yield improvement at advanced nodes.
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LRCX
Lam Research
Etch and deposition equipment. Creates the 3D structures on modern chips. Key beneficiary of increasing chip complexity.
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MKSI
MKS Inc.
Three growth engines: semi tools/subsystems (43%, WFE-driven), advanced-PCB chemistry (30%, secular AI ex-WFE), and Specialty Industrial (27%, non-semi CPO/defense/LEO).
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SNPS
Synopsys
Largest EDA company. Design software plus IP licensing. Synopsys tools are used to design 90%+ of advanced chips.
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TER
Teradyne
Chip testing equipment. Tests every chip after manufacturing to ensure it works. Also makes collaborative robots.
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Source: SEC EDGAR annual and quarterly filings, company earnings conference calls and presentations.
Disclaimer: This page is for educational purposes only. NO investment advice.