Japanese Chip-Making Equipment Suppliers Thrive Amidst Export Limitations
Despite facing export limitations in China, Japanese chip-making equipment suppliers are successfully navigating around these sanctions and turning significant profit in the Chinese market. In particular, Tokyo Electron’s sales in China accounted for 46.9% of their total revenues during the past quarter. The company’s forecast for the current quarter has exceeded analysts’ expectations, leading to a 12% increase in their stock prices.
Tokyo Electron’s Steady Growth Amidst Market Volatility
Tokyo Electron, like many Japanese companies, ends its fiscal year in March. Therefore, it recently updated its operational profit forecast for the complete 12-month period, raising it by 11% from its previous value to 3 billion dollars. This led to a 12% rise in Tokyo Electron’s share prices, marking the highest single-day gain in almost four years.
Future Outlook and Geopolitical Risks
Alongside the updated forecast, Tokyo Electron expressed optimism that expenditures by DRAM memory manufacturers on technology equipment will resume growth this year. The company also projected that high demand for its products in China would continue till at least the end of 2025, primarily driven by local chip manufacturers’ striving for self-sufficiency and their active equipment purchasing.
While analysts caution that Tokyo Electron’s revenue dependence on the Chinese market carries certain geopolitical risks, the company seems to take this into account.