Semiconductor Equipment - Berenberg Bank

More documents

Recommendations

Info

Tokyo Electron Ltd Technology Hardware 3) Our FY 2017 revenue estimate for TEL (see Figure 9) is ¥662bn (27% lower than the TEL bull-case scenario), comprising SPE revenue of ¥450bn (ie after applying the 11% share to TEL’s 2017 $40bn WFE estimate), FPD/PV revenue of ¥101bn (in line with 2007 peak levels, and includes solar revenue of ¥32bn), and components revenue of ¥111bn (in line with the 2007 peak). Our operating margin estimate for FY 2017 is 15% (TEL’s estimate: 19%), including a ¥30bn cost saving compared to the 2012’ ¥146bn level. 4) TEL is aiming to gain share in the etching and cleaning markets, although so is AMAT (which plans to gain a 2-4% WFE share by 2016) and LAM (which is looking to gain by 3-5% in etching and by 5-10% in the cleaning market). In our opinion, with neither an established market position nor experience of these growing markets, TEL is in a weaker position than AMAT and LAM to gain share. Yen depreciation – limited impact The yen has depreciated by 30% against the US dollar since 2012. However, we believe the impact on TEL has been limited. From an operational/cost perspective, its operations are not heavily exposed to FX movements. TEL’s sales contracts are mostly denominated in yen and it hedges its foreign-currency exposures. Its main manufacturing plants are all based in Japan. Therefore the impact on its operations/cost base is limited. From a competitiveness perspective, the depreciation in the yen makes TEL’s prices more competitive compared to its US peers AMAT’s and LAM’s. However, we do not expect TEL to benefit much from this, as we do not believe chipmakers will switch vendors purely because of lower prices. From our conversations with industry specialists, chip-makers care more about equipment performance, reliability and support services than price. Even if chip-makers did switch due to lower prices, TEL’s gain could still be very limited as it only competes with US competitors in some of its end-markets and other Japan-based competitors such as Hitachi and Dainippon have the same advantage. 126
Tokyo Electron Ltd Technology Hardware Key catalysts In our view, the following factors will be the main share price catalysts. • <strong>Semiconductor</strong>/FPD/solar order recovery: As with its peers, TEL trades on its order intake level. Any sign of order recovery in the semiconductor, FPD or solar industries would be positive for TEL’s share price. We believe TEL has already seen a positive order trend for semiconductors over the past two quarters, and we believe the company is likely to see similar order levels in the coming quarter as weaker foundry spending is offset by stronger memory spend. ASML, KLA and LAM have all shown early indications of a memory recovery recently and we expect TEL also to benefit. But while FPD and solar orders doubled in the last quarter (Q4 FY 2013) compared to Q3, we do not expect the orderbook to show material improvement in the near future as the solar and FPD markets remain sluggish. On a net basis, we expect a slight recovery in orders in the coming quarter, mainly driven by the semiconductor segment. • Market share gain in high-growth markets: TEL is mainly exposed to lowgrowth markets such as deposition, LP CVD and dielectric etching. Its only high-growth market is silicon etching, where growth is likely to be fuelled by 20nm DP, FinFET and 3D NAND chip designs. Management is keen to increase TEL’s market share in silicon etching and we believe any market share gain will be positive for TEL’s share price. In our opinion, the silicon etching market is crowded: LAM (with a 59% share), Hitachi (16%) and AMAT (14%) all hold higher market shares than TEL (9%). LAM has strong relationships with logic and foundry players, while AMAT has strong relationships with memory players, hence we believe TEL has very limited opportunities to increase market share. 127
Page 1 and 2:
BERENBERG EQUITY RESEARCH Semicondu
Page 3 and 4:
Table of contents Shrinkage brings
Page 5 and 6:
Semiconductor Equipment Technology
Page 7 and 8:
Page 9 and 10:
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Page 19 and 20:
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
ASML Holding NV Technology Hardware
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
Page 37 and 38:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48:
Page 49 and 50:
Page 51 and 52:
Page 53 and 54:
ASM International NV Small/Mid-Cap:
Page 55 and 56:
Page 57 and 58:
Page 59 and 60:
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76: Suess Microtec AG Small/Mid-Cap: Te
Page 93 and 94: Applied Materials Inc Technology Ha
Page 117 and 118: Tokyo Electron Ltd Technology Hardw
Page 125: Tokyo Electron Ltd Technology Hardw
Page 137 and 138: Semiconductor Equipment Technology
Page 139 and 140: Semiconductor Equipment Technology
show all

Semiconductor Equipment - Berenberg Bank

Create successful ePaper yourself

Delete template?

Save as template?