According to Counterpoint Research, due to delayed investments in cutting-edge semiconductors, the revenue of the top five wafer fab equipment (WFE) manufacturers worldwide decreased by 9% year-on-year in the first quarter of 2024. However, strong DRAM demand offset this decline to some extent. Among these five manufacturers, Tokyo Electron Ltd. unsponsored ADR and KLA's revenues decreased by only a single digit compared to 2023. However, compared to the previous quarter, ASML's revenue decreased by 26% due to customer adjustment of advanced node capacity and KLA's revenue decreased by 5%. The revenues of Applied Materials and Lam Research were flat compared to the previous quarter, while Tokyo Electron Ltd. saw an 18% revenue growth due to strong demand for DRAM and NAND. In addition, due to the increase in DRAM shipments, mainland China has become the main driving force behind the first quarter revenue growth of the top five wafer fab equipment manufacturers in 2024, with a year-on-year growth of 116%. Strong demand for mid-range and mature nodes from applications such as the Internet of Things, autos, and 5G may continue until the end of this year. The memory product revenue of the top five wafer fab equipment manufacturers increased by 33% year-on-year in the first quarter of 2024, mainly due to the increase in NAND spending and strong DRAM demand driven by the increasingly popular AI. The revenue of the wafer foundry part decreased by 29% year-on-year due to customer delay in investing in cutting-edge semiconductors.
According to Counterpoint Research, due to delayed investments in cutting-edge semiconductors, the revenue of the top five wafer fab equipment (WFE) manufacturers worldwide decreased by 9% year-on-year in the first quarter of 2024, but strong DRAM demand offset this decline to some extent. Among these five manufacturers,$ASML Holding (ASML.US)$And$Tokyo Electron (8035.JP)$saw its revenue decline by 21% and 14% compared to the previous year.$Applied Materials (AMAT.US)$, $Lam Research (LRCX.US)$Meanwhile, KLA's revenue saw a smaller decline compared to 2023, only a single digit.
However, compared to the previous quarter, ASML's revenue decreased by 26% due to customer adjustment of advanced node capacity, and KLA's revenue decreased by 5%. The revenues of Applied Materials and Lam Research were flat compared to the previous quarter, while Tokyo Electron Ltd. saw an 18% revenue growth due to strong demand for DRAM and NAND.
In addition, due to the increase in DRAM shipments, mainland China has become the main driving force behind the first quarter revenue growth of the top five wafer fab equipment manufacturers in 2024, with a year-on-year growth of 116%. Strong demand for mid-range and mature nodes from applications such as the Internet of Things, autos, and 5G may continue until the end of this year.
In the first quarter of 2024, the memory product revenue of the top five wafer fab equipment manufacturers increased by 33% year-on-year, mainly due to the increase in NAND spending and strong DRAM demand driven by the increasingly popular AI. The wafer foundry part saw its revenue decrease by 29% year-on-year due to customer delay in investing in cutting-edge semiconductors.
Senior analyst Ashwath Rao said, "The significant growth in memory revenue in the first quarter of 2024 indicates that this sector is starting to turn around and will strongly rebound in the second half of 2024. Although there is short-term market uncertainty, we expect the rebound to continue in the second quarter and may accelerate in the second half of the year. Although the order intake in the first quarter decreased compared to the previous quarter, we expect orders to remain healthy in the coming quarters, thanks to recent US government subsidies and the mass production of 2nm technology in 2025. Looking ahead, AI is becoming a healthy technological transformation and is the primary task of chip manufacturers. The application of AI in PCs, smartphones, and servers will drive equipment manufacturers' revenue growth, and strategic investments may lead to slight adjustments in gross margins in 2024. This creates a strong momentum for industry stabilization in 2025."
Ashwath said, "The sales growth in mainland China in the first quarter of 2024 offset the decline in revenue in other regions. The region is also increasing spending on DUV equipment and using it creatively in some advanced nodes, such as multiple exposures." Chinese chip manufacturers are currently focused on promoting the country's chip manufacturing capabilities and striving to reduce technological dependence.
Editor/ping