Recently Ming-Chi Kuo, an analyst at TFISEC(TF International Securities Group) , said his latest research indicates that lithography maker ASML may sharply cut its 2024 EUV equipment shipment forecast by about 20-30 percent.
According to Kuo, demand for advanced chips and the devices they are needed for may be lower than expected in 2024 due to weak sales of MacBook laptops and iPads. He also predicted that memory chip makers won’t go ahead with planned factory expansions until 2025 at the earliest, which will lead to weaker demand for ASML lithography.
On the question of when the chip industry will recover, Kuo wasn’t sure, saying it could take longer than expected. “The current market consensus is that the semiconductor industry will bottom out in the second half of 2023. However, close attention needs to be paid to whether this bottoming out will be delayed to 1H24/2Q24 2024.”
In April of this year, there were rumors that ASML’s photolithography had also suffered a significant order cut as a result of TSMC’s scaling back of capital expenditure, and that its year-on-year orders for 2024 threatened to be slashed by more than 40%. Although the report did not specify whether TSMC’s purchase of ASML’s 2024 equipment was reduced by 40% or whether ASML’s overall 2024 orders were slashed by 40%, the overall report seems to refer to the former.
Other reports say that it’s TSMC’s 2024 EUV lithography purchases for ASML that have been cut (or delayed) by 40%.
It’s worth noting that during the Q2 FY2023 earnings meeting in mid-July this year, ASML CEO Peter Wennink said, “As for the EUV system, we’re seeing some shifts in demand in terms of timing. It’s driven in large part by factory readiness. The manufacturing plants are not ready yet, so we will ship later (here seems to confirm previous rumors that TSMC asked for a delay in EUV shipments). This means that the initial 40% growth in EUV revenues will drop to about 25% this year.”
In mid-September, Reuters, citing two people familiar with the matter, reported that TSMC had notified key suppliers to delay shipments of high-end chip manufacturing equipment, including EUV lithography, due to growing uneasiness over sluggish customer demand.
Days before the release of the report, Peter Wennink in an interview with Reuters also revealed that some orders for ASML’s high-end equipment has been delayed, but he did not point out the name of the customer, which he said would be a “short-term management” problem, “We have seen several reports about the readiness of the fab. We’ve seen several reports on fab readiness, not just in Arizona…but also in Taiwan,” he said.
Goldman Sachs Securities estimates that TSMC 2023 capital expenditures remain at about $ 31.6 billion, and no adjustment, but because of the research and judgment demand recovery is not clear, TSMC is likely to slow down to advanced process demand-based equipment procurement pace, instead of part of Taiwan’s equipment to Japan, the United States, and other overseas production bases to use, so Goldman Sachs TSMC 2024 capital expenditures are expected to drop from $ 28 billion to $ 25 billion, which is equivalent to the same as the TSMC 2024 capital expenditures from $ 28 billion to $ 25 billion, which is equivalent to the same as the TSMC 2024 capital expenditures. Therefore, Goldman Sachs on TSMC 2024 capital expenditure is expected by 28 billion U.S. dollars to 25 billion U.S. dollars, in the form of 2023 than a 21% reduction; as for the capital expenditure in 2025 from 36 billion U.S. dollars to 35 billion U.S. dollars.
In addition, Goldman Sachs Securities also synchronized downward revision of TSMC 3 nm process capacity utilization, 2023, 2024, respectively, from 40%, 71%, down to 36%, 65%, 2025 is expected to maintain the 78% unchanged. 3 nm process in 2024, 2025 capacity, also from 80,000, 90,000 tablets per month, adjusted to 70,000, 80,000 tablets per month.
However, in July of this year, the second quarter earnings meeting, Peter Wennink has said that as of the time of the earnings release, ASML has a backlog of about 38 billion euros, which provides a good basis for dealing with short-term uncertainty. Despite the increased uncertainty, ASML still expects strong growth in 2023 due to the strong growth trend in the DUV lithography business. Compared to 2022, revenues are expected to grow by 30% year-on-year in 2023 and gross margins are expected to improve slightly.