Tokyo Electron Ltd yesterday raised its full-year outlook even after its quarterly profit missed estimates and said it sees a surge in spending by chipmakers eager to ride an artificial intelligence (AI) spending wave.
The supplier of semiconductor tools now expects operating profit of ￥593 billion (US$3.8 billion) in the year to March, up from its previous forecast of ￥586 billion, but below analysts’ expectations.
Demand for equipment to make DRAM — from high-bandwidth memory to conventional chips — is especially strong, with that trend likely to last for several years, Tokyo Electron said.
Photo: Bloomberg
At the same time, momentum from memorychip makers in China is cooling slightly, while the country’s logic chipmakers are also pushing back delivery schedules for equipment, it said.
“Customer inquiries are extremely strong, and the trajectory suggests that we may see growth of more than 20 percent this year” if constraints in customers’ cleanroom capacity and procurement are resolved quickly, Tokyo Electron finance division officer Hiroshi Kawamoto told an earnings conference.
For the quarter ending December, Tokyo Electron posted an operating profit of ￥116.14 billion compared with average analysts’ estimate of ￥158.6 billion.
Sales were “slightly weak” due to the timing of shipments, Kawamoto said.
The company also announced a buyback of as much as ￥150 billion worth of its shares.
Technology heavyweights from Amazon.com Inc to Alphabet Inc and Alibaba Group Holding Inc (阿里巴巴), as well as sovereign wealth funds around the world, are spending hundreds of billions of US dollars on data centers, chips and other hardware in a race to lead in AI.
Tokyo Electron, which counts Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co as its customers, has benefited from growing appetite for advanced chipmaking equipment. However, the Japanese company has also had to navigate export restrictions due to heated technological rivalry between the US and China.
The Tokyo-based company is also expected to benefit from TSMC’s plans to use 3-nanometer process technology at its upcoming second fab in Japan.
After several years flying high as Asia’s best Nvidia Corp proxy, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is increasingly vying with other artificial intelligence (AI) stocks for investor attention. Stock traders are chasing a wider array of beneficiaries as mainstream usage of AI creates demand for hardware beyond the most-advanced chips TSMC makes for Nvidia. Subthemes from the deepening memory crunch to advances in robotics are also luring bids. At the same time, investment caps on single stocks are pushing funds to diversify, while retail investors long familiar with TSMC through its US depositary receipts are being offered a broader set of
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