Key chip equipment supplier Tokyo Electron Ltd yesterday slashed its full-year outlook after memorychip makers cut spending and the US ramped up restrictions on cutting-edge chipmaking gear exports to China.
The company now forecasts an annual operating income of ¥546 billion (US$3.7 billion), down 24 percent from its previous forecast, despite quarter-on-quarter revenue growth worldwide. Its caution echoes pessimism at US rivals, such as Applied Materials Inc and Lam Research Corp.
Tokyo Electron would not try to take advantage of an opportunity created by the US restrictions on its US peers, Hiroshi Kawamoto, general manager of the company’s finance unit, told a news conference.
Photo: REUTERS
“We understand US makers may be facing difficulties doing business with Chinese customers. We won’t try to fill the hole they leave,” he said.
The company has been operating at nearly full capacity, with months-long lead times for equipment delivery.
With a client list that includes Semiconductor Manufacturing International Corp (中芯國際) and Yangtze Memory Technologies Co (長江存儲), Tokyo Electron earns about one-quarter of its revenue in China, although that number includes foreign firms with factories there.
Japanese chipmaking gear exports bound for China are at record highs so far this year, up more than 20 percent year-on-year in the third quarter.
“US sanctions will prompt Chinese makers to cut capital spending, leading to delays on deliveries,” Kawamoto said.
The administration of US President Joe Biden announced sweeping regulations to constrain sales of its cutting-edge semiconductors and chipmaking equipment to China, roiling the globally interconnected US$550 billion industry.
While the move dealt a major blow to China’s chip sector, it saddled US semiconductor equipment firms with stringent restrictions, which are forecast to cost them billions of US dollars in revenue.
That was on top of spending cuts announced by memorychip makers from SK Hynix Inc to Micron Technology Inc.
The US has signaled to its allies its wish that they follow suit on export controls to curb China’s access to critical chip technologies.
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