Huatai Securities released a research report saying that industry-side semiconductor inventory levels continue to improve, the utilization rate of logic and memory customer lithography equipment continues to increase, and demand is expected to pick up in the second half of the year.
The Zhitong Finance App learned that Huatai Securities released a research report saying that industry-side semiconductor inventory levels continue to improve, the utilization rate of logic and memory customer lithography equipment continues to increase, and demand is expected to pick up in the second half of the year. AI-related demand continues to grow, DDR5 and HBM drive memory demand, and logic customers continue to absorb new production capacity. SEMI expects semiconductor manufacturing equipment to resume growth in 2024. Driven by the front-end and back-end markets, sales are expected to reach a new high of 124 billion US dollars in 2025, and it is optimistic that the global semiconductor equipment industry will recover.
The main views of Huatai Securities are as follows:
New ASML1Q orders declined month-on-month, keeping the 24/25 guidelines unchanged, and new EUV products progressed smoothly
Huatai Securities said that from the 1Q24 performance meeting of leading Dutch semiconductor equipment company ASML (ASML US), it can be seen that 1) ASML's first quarter results were in line with previous guidelines, new orders fell month-on-month, and the Q2 guidelines were lower than market expectations; 2) The company's 2024 boom guidelines remained unchanged, and revenue in 2025 was expected to be at a high level of 30-40 billion euros; 3) As downstream demand picked up, AI-related demand was expected to continue to grow in the second half of the year, and AI-related demand for DDR5 and H memory will continue to grow. Logic customers continue to absorb new production capacity; 4) Mainland China remains strong. ASML says it can maintain China's installed equipment base, and government measures still need to be paid attention to; 5) Low NA EUV NXE:3800 in 2025 and the increase in High NA EUV shipments are expected to increase the company's gross profit margin.
The 1Q performance was in line with the guidelines, new orders declined, and the 2Q performance guidelines fell short of market expectations
ASML1Q24's revenue was 5.29 billion euros, -22% YoY, -27% (previous guidance: 5 to 5.5 billion euros), achieving a gross profit margin of 51.0%, slightly exceeding the guideline (48-49%); 1Q added 3.6 billion euros of new orders, down 61% month-on-month, including 660 million euros of new EUV orders, down 88.2% month-on-month. By product, EUV, ArFi, KrF, ArF Dry, and i-line accounted for 46%, 39%, 8%, 3%, and 1% of revenue, respectively. The company expects Q2 revenue of 5.7-6.2 billion euros, lower than Bloomberg's agreed estimate of 6.46 billion euros, and gross margin of 50% to 51%. 1Q24 delivered the first NXE:3800 EUV with a wph of 220 to the customer. 4Q23 delivered the first High NA EUV EXE: 5000 is currently being installed, and 1Q24 is delivering the second to customers.
Mainland China remains strong, and ASML reviews can maintain China's installed equipment base
The revenue of 1Q24 companies split by region in China, South Korea, the United States, and mainland China accounted for 6%, 19%, 6%, and 49%. Among them, revenue from mainland China decreased by 12.3% month-on-month. Huatai Securities said that although sales in mainland China declined in the first quarter, they remained strong, increasing the month-on-month share of mainland China compared to other regions. Company reviews can maintain the foundation of equipment already installed in China, and future discussions need to continue to be followed by government discussions. The company maintained the forecast that the new export control regulations might have a 10-15% impact on sales, but also emphasized strong expectations for sales in China.
Outlook: Industry demand is expected to pick up in the second half of the year, and the company remains unchanged in its 24/25 guidance
Huatai Securities believes that industry-side semiconductor inventory levels continue to improve, the utilization rate of logic and memory customer lithography equipment continues to increase, and demand is expected to pick up in the second half of the year. AI-related demand continues to grow, DDR5 and HBM drive memory demand, and logic customers continue to absorb new production capacity.
Huatai Securities said that SEMI expects semiconductor manufacturing equipment to resume growth in 2024. Driven by the front-end and back-end markets, sales are expected to reach a new high of 124 billion US dollars in 2025, and it is optimistic that the global semiconductor equipment industry will recover. ASML's guidance for the year 24 remains unchanged. Revenue is expected to be flat year on year in 2024, and the company emphasizes that revenue in 2025 should be at a high level of 30 to 40 billion euros. The company currently has an order backlog of 38 billion euros. To reach the 25-year median revenue guideline, it is estimated that Q2-Q4 will require more than 4 billion euros of orders per quarter in '24.
Risk warning: The semiconductor cycle is declining. The content of unlisted companies or individual stocks covered in this research report is a compilation of objectively disclosed information on them, and does not represent the recommendation or coverage of this company or stock by this research team.