Following recent downward revisions in annual financial targets by semiconductor lithography equipment manufacturers ASML and Canon, Nikon has also announced a cut to its forecast.

According to a press release from Nikon, the company expects its 2024 performance to fall short of initial plans due to delays in the recovery of market conditions within its Precision Equipment Business and Components Business, resulting in lower-than-expected demand and postponed sales of certain products.

Nikon has also revised its consolidated financial forecast for the year ending March 31, 2025, citing a delayed recovery in semiconductor-related markets as the reason for adjusting its sales plans in the lithography system sector. However, sales in the Imaging Products Business are anticipated to align with projections.

Notably, IC Smart reported that ASML revealed its Q3 financial results on October 15, reporting sales and gross margins in line with expectations. However, new orders plummeted by 53% quarter-over-quarter, falling short of half the market’s expectations. ASML has also lowered its 2025 sales target from a previously estimated range of €30 to €40 billion down to €30 to €35 billion, attributing the slowdown to a lagging recovery in most markets, with certain fabs delaying their demand for lithography systems, particularly EUV systems, despite strong demand in the AI sector.

The same IC Smart report noted that on October 24, Canon announced record high revenues for Q3 2024 (July to September) but also lowered its full-year performance expectations. Revenue was revised down from an initial estimate of ¥4.6 trillion to ¥4.54 trillion, while operating profit was adjusted from ¥465 billion to ¥455.5 billion. The net income target was cut from ¥335 billion to ¥325 billion, with Canon attributing this to an increase in the yen’s exchange rate. Additionally, the company has reduced its sales target for semiconductor lithography machines from 244 units to 239 units for the current fiscal year.

(Photo credit: ASML)

While driving advances in HBM, foundry, and advanced packaging, AI generative applications also boosted the demand and sales of semiconductor equipment.

Recently, Japanese semiconductor equipment giant DISCO announced that its non-consolidated (individual) shipments for April to June 2024 amounted to JPY 85.7 billion, marking a 50.8% year-on-year increase. The quarterly (individual) shipment surpassed the JPY 78.5 billion from January to March 2024, setting a new record high.

DISCO pointed out that the demand for precision processing equipment related to generative AI remains solid; for consumable-type precision processing tools, the demand remains high, align with the operation rates of customers’ equipment.

Semiconductor equipment refers to specialized equipment used in the production of various types of integrated circuits and discrete semiconductor devices, encompassing various products mainly categorized into front-end process equipment and back-end process equipment.

Front-end process equipment is used in the wafer manufacturing process involving products such as lithography machines, etching equipment, thin film deposition equipment, and CMP equipment.

Back-end process equipment is mainly used in the packaging and testing processes of semiconductor products to ensure product quality and reliability. Representative products include dicing equipment, packaging equipment, testing equipment, and wafer dicing saws, which are used to cut wafers into individual chips for subsequent packaging and testing. DISCO is a leading manufacturer in this segment.

Japanese semiconductor equipment holds a significant position globally, gathering numerous renowned companies such as Tokyo Electron, Advantest, Hitachi High-Tech, Nikon, and DISCO.

With the AI boom, the industry believes that sales of Japanese semiconductor equipment will continue to climb up. The Semiconductor Equipment Association of Japan (SEAJ) forecasts that Japan’s semiconductor equipment sales is expected to exceed JPY 4 trillion for the first time in 2024, representing a 15% annual increase, which is projected to surpass JPY 5 trillion by 2026.

This growth is primarily benefited from the increasing demand for AI-driven GPU and HBM. In May 2024, Japanese semiconductor equipment sales surged by 27% YoY, continuing to grow and setting new monthly records.

China’s semiconductor equipment market is also enjoying robust growth driven by favorable factors like AI. Recently, data jointly released by the Semiconductor Equipment and Materials International (SEMI) and SEAJ indicated that in the first quarter of 2024, global semiconductor equipment sales totaled USD 26.4 billion, down 2% YoY and 6% QoQ, which was dragged down by the sluggish demand in some markets.

Despite the headwind globally, China’s sales reached USD 12.52 billion in the first quarter, up by 113% YoY, maintaining its position as the world’s largest semiconductor equipment market for the fourth consecutive quarter.

Read more

• [News] Booming GPU and HBM Demand Pushes Japanese Chip Equipment Annual Sales to Record High
• [News] New Regulations Reportedly Introduced by Japan Regarding Semiconductor Exports

(Photo credit: TEL)