This column originally appeared on April 21 on Real Money, our premium site for active traders. Click here to get great columns like this.

As good as business has been for many chip developers, it has arguably been even better for the companies supplying the equipment used to manufacture their chips. Large flash memory investments, the demands of newer manufacturing processes, a pickup in spending at Intel (INTC) - Get Report and China's efforts to join the chip industry's big leagues have all propelled industry sales higher.

This week's earnings reports from Lam Research (LRCX) - Get Reportand ASML (ASML) - Get Report, respectively the world's second and third-biggest chip equipment makers, gave little reason to think that demand will be cooling off soon. Nonetheless, with the shares of so many equipment makers having soared over the last 15 months, it's worth keeping an eye out for some roadblocks that could appear.

Lam, a major provider of deposition, etching and cleaning equipment for chip manufacturers, reported fiscal third quarter (March quarter) revenue of $2.16 billion (up 64% annually) and adjusted EPS of $2.80, topping consensus analyst estimates of $2.13 billion and $2.55. It also guided for fourth quarter revenue of $2.2 billion to $2.4 billion and EPS of $2.88 to $3.12, above consensus estimates of $2.19 billion and $2.65. Shipments rose 25% sequentially and 66% annually to $2.41 billion.

Lithography equipment leader ASML reported first quarter revenue of €1.94 billion (up 46%) and EPS of €1.05, topping consensus estimates of €1.82 billion and €0.93. Q2 revenue guidance of €1.9 billion to €2 billion is merely in-line with a €1.97 billion consensus. But bookings rose 20% sequentially and 127% annually to €1.89 billion.

ASML's ho-hum sales guidance, together with concerns about a light gross margin outlook blamed on a sales mix shift towards newer extreme ultraviolet (EUV) lithography systems, led its shares to slump post-earnings on Wednesday. But they recovered nearly all of their losses on Thursday. Lam has risen 10% to new highs since its Tuesday afternoon report, and given a lift to equipment peers such as Applied Materials (AMAT) - Get Report, Rudolph Technologies (RTEC) - Get Reportand Axcelis (ACLS) - Get Reportalong the way.

On its earnings call, Lam noted big investments by flash manufacturers in production lines that can make cheap/dense 3D NAND flash remains a tailwind, particularly with global NAND sales remaining quite strong. And the company's DRAM shipments rose from depressed levels, as an industry boom cycle compels manufacturers to spend a little more. Shipments to foundries such as Taiwan Semiconductor and Globalfoundries were roughly flat.

Importantly, Lam said it thinks 2017 industry wafer fab equipment (WFE) spend is tracking above prior expectations, and that its own addressable market and sales are outperforming even more. The company added its initial modeling suggests WFE demand will remain strong in 2018.

The remarks come after trade group SEMI estimated North American chip equipment makers saw their billings for the three months ending in February rise 63.8% annually to $1.97 billion, a big improvement from the 25.2% growth seen during the three months ending in November. While such growth rates obviously won't last, research firm Gartner's January forecast for WFE sales to rise 5.7% this year (to $36 billion) is starting to look conservative, and so might its 2018 forecast for sales to rise just 0.7%.

ASML, like Lam, reported seeing strong demand from NAND and DRAM clients. It's also benefiting from the investments logic chip manufacturers are making to ramp production of 10-nanometer manufacturing processes (likely a reference to Intel), and investments by foundries in 7-nanometers processes due to go live in 2018.

The company also mentioned its backlog of EUV equipment orders rose by three sequentially to 21. Samsung plans to start using EUV at the 7-nanometer node, and (though much is still up in the air) other chipmakers might do so as well. ASML plans to ship 12 EUV systems this year, and up to 24 next year.

Amid all the good news, however, there are some potential risks that could throw a wrench into the very cheery consensus that has formed in recent months for industry demand.

    China, which is expected to invest heavily chip manufacturing over the the next few years with the help of strong government support, could rethink its spending pace. Digitimes observed on Friday that several Chinese fabs due to make 12-inch (300mm) wafers have been put on hold. Though to be fair, that's just a fraction of the fabs due to open in China between now and 2020. Beijing's fickle spending priorities are well-known to tech investors. This week saw optical component makers sell off on a UBS report pointing to softer Chinese orders, and analog/mixed-signal chipmaker Maxim Integrated drop after stating its auto chip sales will drop sequentially, thanks partly to the slashing of Chinese EV subsidies. On its call, Lam mentioned it expects Chinese equipment demand to pick up in 2018, before taking off in 2019 and 2020.

    With massive 3D NAND projects having been greenlighted in China and elsewhere, there's a risk that manufacturers fearful of a supply glut could pare back their plans. Intel, SK Hynix, Toshiba and China's Tsinghua Unigroup are among those that have announced plans to make multi-billion dollar investments in new 3D NAND plants or production lines. Toshiba, of course, is in the midst of trying to sell its giant NAND business. The buyer may or may not choose to invest as aggressively in 3D NAND as Toshiba planned to.

    While recent shortages and big price hikes make it a no-brainer for DRAM makers to up their spending over the near-term, the industry has largely consolidated around three firms (Samsung, Hynix and Micron ), and from all signs, these companies are intent on avoiding a repeat of the capacity glut that led prices to tumble in 2015. That's good news for the DRAM makers, assuming they can avoid shooting themselves in the foot again, but less so for their equipment suppliers. Taiwanese memory maker Powerchip technology said this week it expects DRAM supplies to remain tight for a long period of time.

    Intel, which has kept its capex at subdued levels in recent years, is giving the industry a boost this year by setting a 2017 capex budget of $11.5 billion to $12.5 billion, up sharply from 2016 capex of $9.5 billion. Its 3D NAND investments are partly responsible. But with Intel only forecast by analysts to see its sales rise 1% in 2017 and 2% in 2018 -- PC and enterprise server pressures are factors -- it's not a given that the company will keep hiking its spending in future years.

    Consolidation among smaller fab owners -- particularly in the analog/mixed-signal and microcontroller markets -- could hurt industry capex a bit. Analog Devices recently closed its $14.8 billion acquisition of Linear Technology. Microchip bought Atmel last spring for $3.6 billion, and ON Semiconductor bought Fairchild Semiconductor for $2.4 billion.

    None of these potential headwinds are guaranteed to transpire, and some might only cause a moderate drop in demand if they do. But considering the high expectations now priced into the shares of chip equipment makers, and how cyclical their industry has historically been, such risks certainly bear monitoring.