Despite 2023 slump, wafer fab equipment revenue will recover

A slight slump in wafer fab equipment revenue in Q4 2022, down 1% QoQ, led to a weak Q1 2023, down 26% QoQ, which marks the first quarter of a 2023 downturn.

“Q1 2023’s expected revenue is US$20 billion, a value similar to that generated in Q4 2020. The decline is largely due to memory chipmakers pushing back or even cancelling orders, despite long equipment lead times and high fab utilisation rates,” said Taguhi Yeghoyan, Ph.D, Senior Technology & Market Analyst, Semiconductor Equipment, Subsystems and Testing Division, at Yole Intelligence.

Equipment vendors are trying to rebook these lost orders in logic or specialty devices and advanced packaging. Yet overall, 2023 revenues may fall by up to 13% YoY to $87 billion. On top of that, the geopolitical situation brings additional headwinds to US, European, and now Japanese equipment vendors, depriving them of lucrative regional shipments. Process technologies, including etch and clean, deposition, ion implantation, metrology, and inspection, show considerable revenue declines QoQ. The only exceptions are the patterning and wafer bonding segments.

On the other hand, service and support revenue is growing steadily at 1% YoY with yearly increments in the installed base of 7% YoY.

In this context, Yole Intelligence releases its new product: the Wafer Fab Equipment Market Monitor. In this brand-new Market Monitor, the company tracks the market for machinery used for wafer-level semiconductor device processing on a quarterly basis. This machinery is the backbone for all semiconductor ecosystems and an enabler for subsequent chip technology advancements and social digitisation.

“The monitor strives to understand overall wafer fab equipment vendor revenue in relation to semiconductor chipmaker revenue and CapEx, For that, the monitor tracks the historical 2016-2022 evolution of wafer fab equipment revenue and provides insight for the 2023-2028 revenue forecast. Furthermore, the monitor provides a wafer fab equipment revenue breakdown to equipment billing and service and support revenue,” said John West, Director, Semiconductor Equipment, Subsystems and Testing Division, Yole Intelligence.

Equipment billing revenue is further detailed with respect to device application, process application, and region. Finally, the monitor provides detailed 2016-2022 market shares for each of the market segments mentioned above.

This is Yole Intelligence’s first edition of this Monitor. Quarter after quarter, the company will add companies and segments as they become relevant. Indeed, the Market Monitor is a constantly evolving service where semiconductor companies can expect improvements every period. Each quarter will also feature a focused report on a particular product or technology.