According to the Nikkei Asia report, the slowdown in the performance of global semiconductor manufacturing equipment enterprises is becoming increasingly obvious. Of the 9 major enterprises, 8 enterprises' operating revenue from January to March 2023 (some from February to April) decreased year on year, or the growth rate slowed down. The deterioration of the semiconductor market led to a decline in demand, and the export restrictions imposed by the United States on China also had a negative impact. On the other hand, the stock price rebounded earlier due to the belief that the negative factors have been basically exhausted. The confidence and resilience in the future performance recovery period will become the focus.

The performance forecast released by American Applied Materials Corporation (AMAT) on February 16 shows that the operating revenue from February to April 2023 is expected to be $6 billion to $6.8 billion, a year-on-year decrease of 4% to an increase of 9% in the previous year. The predicted midpoint (growth of 2%) hit the lowest level of income increase and decrease in three and a half years.

"A large number of cancellations and postponements of orders from memory chip customers are taking place," Bryce Hill, the company's chief financial officer, said at the telephone press conference on the same day. Despite the strong performance of automotive chips, the most advanced computing logic semiconductors and OEM businesses are weakening.

From the perspective of nine large enterprises from October to December 2022 (AMAT from November to January), five enterprises such as Lam Research in the United States and Advantech in Japan achieved a profit growth at the end of the period. However, from January to March (AMAT from February to April), the operating revenue of each company is expected to slow down significantly. The revenue of six companies, such as Lam Group and Tokyo Electric, may decline from the same period last year, and the growth rate of Advan and SCREEN Holdings, which are expected to increase, will fall to the lowest level in about two years.

According to the data of the International Semiconductor Equipment and Materials Association (SEMI), the size of the world semiconductor equipment market will reach a record high of US $108.5 billion in 2022. After three years, the negative growth in 2023 is basically a foregone conclusion. Tokyo Electric and Lam Group forecast that the pretreatment equipment market, which accounts for the majority of global manufacturing equipment sales, will decrease by about 20% in 2023 compared with the previous year.

One of the main reasons is that semiconductor manufacturers reduce investment. Due to the decline in demand for smart phone terminals and the slowdown in the economy, semiconductor users began to reduce the excess inventory accumulated in recent years, and the semiconductor market is rapidly deteriorating. From the perspective of equipment investment in 2023 of the storage chip giant with the most obvious impact, SK Hynix in South Korea decreased by more than 50% compared with the previous year, and Micron Technology in the United States decreased by about 40%.

The export restrictions imposed by the United States on China have also become a heavy burden. Lam Group estimates that revenue in 2023 will be affected by US $2 billion to US $2.5 billion. Due to the stagnation of equipment investment by Chinese semiconductor manufacturers, the demand for equipment outside American companies is also declining. From October to December 2022, the share of operating revenue of Tokyo Electronics in China has dropped to 22%, down about 5 percentage points from the same period last year.

"If we cannot obtain American equipment, it will be difficult for Chinese customers to produce it. Therefore, our equipment cannot be sold," said Hiroshi Kawamoto, executive director of Tokyo Electronics.

It is expected that Japan and the Netherlands will also keep pace with the restrictions on the export of semiconductors from the United States to China, and the impact is likely to intensify in the future.

Disco, which is involved in the terminal process equipment for cutting wafers into chips, is cautious about this. The company said, "The restrictive measures are mainly aimed at the previous process, but if restricted, the output may gradually decrease and the trend will be closely observed." Advanced, who is involved in testing equipment, also said, "Chinese customers may adjust their investment plans and pay attention to (equipment demand)".

Of course, in the stock market, more and more people believe that the negative factors have been basically exhausted. Although the share price of each company will have a major adjustment after 2022, it is still about 20% higher than the end of last year. Many people believe that semiconductor de-stocking will end in the first half of 2023. He Helishu, president of Tokyo Electric, said that "the manufacturing equipment market will gradually recover from the second half of 2023." The expectation of this prospect is increasingly high.

As for the export restrictions imposed by the Japanese government on China after the United States, Xiuping Nakamura of Goldman Sachs Securities said, "(according to the restrictions announced by the United States last October) as long as the restrictions are not expanded, the impact will be limited."

The priority in the future is the degree of certainty of the recovery period. Although the recovery of memory chips is indispensable, Takeshi Hanaya of SMBC Nikko Securities said that "if the demand for terminal applications such as smart phones in China continues to be weak, the recovery of equipment demand will be slow". With regard to the trend of major semiconductor companies, Tomohiro Katayama of Sumitomo Mitsui Trust Asset Management said, "There is a risk of downward adjustment in the investment plans of TSMC and Samsung Electronics in South Korea (there is no significant reduction in investment in 2023)."

In addition, the rebound strength under the recovery situation is also full of uncertainty. Taking into account the needs of data centers and subsidies from governments to the semiconductor industry, the president of Tokyo Electric, Chuanhe, said that "the pre-treatment equipment market in 2024 will be flat or growing compared with 2022, which will hit a record high". However, the head of Sumitomo Mitsui Trust Asset Management, Kazuyama, believed that "the stock market lacks confidence due to concerns about final demand, etc." It seems that there is still a lack of favorable wind needed for the stock price to turn into a broad rise.