Tokyo Electron Lifts Outlook in Sign of AI -Spurred Chip Spending
(Bloomberg) — Tokyo Electron Ltd. 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 AI spending wave.
The supplier of semiconductor tools now expects operating profit of ¥593 billion ($3.8 billion) in the year to March, up from its previous outlook of ¥586 billion but below 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. At the same time, momentum from memory makers in China is cooling slightly, it said, while the country’s logic chipmakers are also pushing back delivery schedules for equipment.
Finance Division Officer Hiroshi Kawamoto said, during an earnings conference Friday,
Customer inquiries are extremely strong, and the trajectory suggests that we may see growth of more than 20% this year” if constraints in customers’ cleanroom capacity and procurement are resolved quickly,
For the December quarter, Tokyo Electron earned an operating profit of ¥116.14 billion, compared with the average analyst estimate of ¥158.6 billion. The 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. as well as sovereign wealth funds around the world are spending hundreds of billions of dollars on data centers, chips and other hardware in a race to lead in artificial intelligence.
Tokyo Electron, which counts Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. as its customers, has benefited from growing appetite for advanced chipmaking equipment. But 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 chip processes at its upcoming second factory in Japan.
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Tokyo Electron Lifts Outlook in Sign of AI -Spurred Chip Spending, source
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