[News] Semiconductor Equipment Market Sees Robust Growth Fueled by AI Despite Declining China Demand

---

---

According to a report from MoneyDJ, citing a Nikkei report from December 4, generative AI demand is expected to boost revenue growth for semiconductor equipment manufacturers this quarter. The report highlights that while demand from the industrial and automotive markets remains weak, strong demand driven by generative AI is significantly boosting the semiconductor equipment market.

The report indicates that, citing Nikkei, revenue for the top ten semiconductor equipment manufacturers is forecasted to grow this quarter (October–December, or for some companies, November 2024–January 2025).

Citing Nikkei, the report from MoneyDJ notes that while revenue growth from Applied Materials and Teradyne is expected to be less than 10%, the revenue of companies like Japan’s Tokyo Electron (TEL) and the Netherlands’ ASML, is projected to increase by 10% to 30% this quarter.

In the previous quarter (July–September), revenue from all top ten semiconductor equipment companies has increased, according to the report from MoneyDJ citing Nikkei. This marked the first time in 11 quarters, since October–December 2021, as noted in the report from MoneyDJ citing Nikkei. This overall growth is expected to continue this quarter.

Declining Revenue Share from the Chinese Market

On the other hand, U.S. export controls on China are projected to cause a decline in the proportion of revenue from the Chinese market, as the report notes.

As of the last quarter, with China accelerating its push for semiconductor self-sufficiency, the combined revenue from the Chinese market for nine of the top ten equipment manufacturers, excluding ASMI, has consistently remained at USD 10 billion for five consecutive quarters, according to the report from MoneyDJ citing Nikkei.

The report indicates that the proportion of revenue from China had increased from 20% two years ago to around 40%, as of the last quarter.

However, due to U.S. export controls, the revenue share from the Chinese market has begun to decline from its peak. The report notes that it was 39.9% in the April–June period this year and dropped to 37% in July–September.

With President-elect Donald Trump set to return to the White House, stricter controls on China are anticipated. The report highlights that these measures are expected to further reduce the revenue share from the Chinese market.

Tokyo Electron (TEL) estimates that its Chinese revenue share will drop from 41% in the last quarter to around 35% in the second half of the fiscal year (October 2024–March 2025), as the report notes, citing Nikkei. Similarly, ASML projects its Chinese revenue share to decline from 50% to 20% by 2025.

Read more

• [News] A Quick Recap: Impact of the Latest U.S. Chip Export Curbs on China and Global Semiconductor Giants
• [News] Applied Materials and Lam Research Reportedly Seek Alternatives to Chinese Components

(Photo credit: ASML)