Issue



Japan tool firms cut FY forecast


09/01/1998







Japan tool firms cut FY forecast

A new assessment of mid-term equipment market conditions from the Semiconductor Equipment Association of Japan (SEAJ) paints a less-than-rosy picture of the next two and a half years, with Japanese equipment companies expecting their aggregate sales to dip this year and see only modest recovery in 1999 and 2000.

The new survey is a follow-up to one released at the beginning of the year; SEAJ took the unusual step of conducting a mid-year survey due to the rapidly changing conditions in the market for wafer fab equipment. Expected 1998 sales are now about one-third less than what had been anticipated in the previous survey. Because Japanese equipment companies` sales are tied to a significant extent to purchases by Japanese chipmakers, the survey may reflect the recent climate of capital spending cuts in Japan, and a sense that no immediate resurgence in spending is likely.

In addition, four of the top five Japanese equipment suppliers have announced forecasts for declining sales in the current fiscal year; stepper vendor Canon is the one exception, and observers suggest that the company will be forced to revise its forecast later in the year.

According to the SEAJ survey, which is based on inputs from 130 member companies, 1998 sales of Japan-made semiconductor equipment are now expected to total 1127.5 billion yen ($8.04 billion), rather than the 1749.7 billion ($12.5 billion) previously forecast. This represents a 15% decline from last year.

For 1999, a 12% increase is foreseen, to about 1263 billion yen; this is below 1997 levels. In 2000, a 15% increase is expected, with revenues seen rising to 1447.3 billion yen ($10.32 billion). For the 1998-2000 period, average annual growth would be about 4%.

Individual firms` projections are indicative of the generally gloomy mood that currently prevails. Tokyo Electron Ltd. now expects its fiscal year sales to total 322 billion yen ($2.3 billion), down 13.3% from the previous FY. Advantest, with most of its sales in the volatile ATE market, expects an even deeper drop, anticipating sales of 151 billion yen ($1.07 billion), a 29.8% decline.

The two Japanese lithography suppliers, Nikon and Canon, are currently anticipating different trends. Nikon said its sales would be about 140 billion yen ($998 billion), down more than 10% from the last FY. Canon, however, said it currently anticipates a sales increase of about 3% to 112 billion ($799 million). Canon might see some sales gains by virtue of its early announcement of a 300-mm-compatible lithography system, but many in the industry expect the company to reduce its outlook at some point.

Hitachi said its semiconductor equipment unit would see revenues drop 8.5%, to about 75 billion yen ($535 million), while Dai Nippon Screen is eyeing sales of 73 billion yen, down 16.9%. - P.N.D