Bible 1Q23 - Semicap: Risk of negative surprises remain
Today, we are publishing the Semicap section of our 19th Tech Infrastructure Quarterly Bible. The Tech Bible is a must-read for any tech investor, as it summarizes the quarterly earnings reports from the over 130 companies we track, providing an update on our key perspectives and convictions.Semicap revenues have begun to pullback, driven by a rapid decline in memory spending partially offset by strong mature logic demand, mostly from China. Expectations for a $75bn WFE market in 2023 are unchanged but manufacturers are uncertain on the timing of a recovery while consensus expects a mild rebound in 2024. We are more cautious and see a high risk of a pause in capacity additions at the trailing edge offsetting any recovery in leading edge logic, while memory spending may remain very weak.
Applied Materials provides manufacturing equipment, services and software to the semiconductor, display and related industries. The company's segments are: Semiconductor Systems, which develops, manufactures and sells a range of manufacturing equipment used to fabricate semiconductor chips; Applied Global Services, which provides integrated solutions to support equipment and fab performance and productivity; and Display and Adjacent Markets, which is comprised of products for manufacturing liquid crystal displays, organic light-emitting diodes and other display technologies for TVs, monitors, laptops, personal computers, electronic tablets, smart phones, and other consumer-oriented devices.
ASML Holding provides lithography systems for the semiconductor industry, manufacturing machines that are used in the production of integrated circuits or chips. Co. develops, produces, markets, sells and services advanced semiconductor equipment systems exclusively consisting of lithography systems. Co. sells its products to micro-processor manufacturers and Foundries, NAND-Flash memory and DRAM memory chipmakers. Co.'s products line includes the following: PAS 5000 lithography systems, which Co. no longer manufactures but continues to refurbish; PAS 5500 products; TWINSCAN DUV systems and TWINSCAN EUV systems based on a new platform utilizing the concepts of the TWINSCAN platform.
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