EB SECURITIES: Global wafer factory capacity to expand significantly, semiconductor equipment industry's prosperity is on the rise.

EB SECURITIES released a research report indicating that global wafer fab capacity is significantly expanding, and wafer fab equipment spending continues to rise. Leading companies in the global semiconductor front-end equipment are expected to see revenue growth in the future, while back-end equipment is expected to gradually recover. According to SEMI's forecast, spending on 12-inch wafer fab equipment will continue to climb from 2023 to 2027, with a CAGR of 9%; benefiting from mature process investments, revenue is expected to increase by 4% in 2023, by 20% in 2025 due to High NA EUV (high numerical aperture extreme ultraviolet lithography) and HBM, and by 12% in 2026 due to GAAFET technology. Global 300mm wafer fab equipment investment is projected to increase by 20% to $116.5 billion in 2025, rise by 12% to $130.5 billion in 2026, and reach a historical high in 2027. In 2024, it is expected that 60 new wafer fabs will be added. Among them, 23 wafer fabs have started construction, with 6 in mainland China accounting for 26.09%; and 37 new wafer fabs have been put into operation, with 19 in mainland China accounting for 51.35%. EB SECURITIES stated that revenue growth is expected for the leading companies in the global semiconductor front-end equipment. The combined revenue of the five front-end equipment companies (ASML, AMAT, KLA, LAM, TEL) in Q2 2024 amounted to $23.502 billion, an increase of 5.75% from the previous quarter; the net profit reached $6.244 billion, an increase of 11.42%. According to Bloomberg's consensus expectations, the combined revenue of the five front-end equipment companies is forecasted to increase to $25.406 billion in Q3 2024, a growth of 8.10% compared to the previous quarter; net profit is expected to increase to $6.626 billion, a growth of 6.12%. Back-end equipment is expected to gradually recover. The combined revenue of the two leading semiconductor test equipment companies (Teradyne, Advantest) in Q2 2024 amounted to $1.62 billion, an increase of 7.04% from the previous quarter; with Teradyne's revenue at $730 million and Advantest's revenue at $890 million. The net profit reached $295 million, with Teradyne at $142 million and Advantest at $153 million. According to Bloomberg's consensus expectations, the combined revenue of the two test equipment companies is forecasted to be $1.725 billion in Q3 2024, with a combined net profit of $307 million. Risk Warnings: Risks include lower-than-expected semiconductor demand, macroeconomic performance falling short of expectations, and intensified industry competition. This article is sourced from a research report released by EB SECURITIES and the author is analyst Liu Kai.