Tokyo Electron Ltd., one of the world’s largest suppliers of chipmaking equipment, projected earnings well below analysts’ estimates in another negative signal for the global semiconductor sector.
(Bloomberg) — Tokyo Electron Ltd., one of the world’s largest suppliers of chipmaking equipment, projected earnings well below analysts’ estimates in another negative signal for the global semiconductor sector.
The Japanese company forecast operating income of ¥393 billion ($2.9 billion) for the year ending March 2024, lagging the ¥446.7 billion average estimate.
That disappointing outlook came after it reported a smaller-than-expected 9.4% profit slide for the March quarter of 2023.
Chip suppliers are grappling with myriad uncertainties as the US imposes sanctions on China, the world’s largest semiconductor market, to try and contain the Asian country’s technological and geopolitical ambitions.
Tokyo Electron has been closely watched for indications of demand after Japan and the Netherlands agreed to join the US in imposing strict export restrictions on advanced semiconductor technology and products to China.
More broadly, chipmakers are struggling with volatile demand as recessionary fears weigh on global spending for smartphones, computers and other electronics.
Taiwan Semiconductor Manufacturing Co., one of Tokyo Electron’s largest customers, warned in April that demand from the mobile and PC industries remains “soft” for now, though the market was stabilizing and likely to improve in the second half.
It’s sticking with earlier plans to spend as much as $36 billion upgrading and expanding capacity in 2023.
Tokyo Electron, one of a handful of indispensable suppliers to the chipmaking industry, got about 23% of its revenue from China in the December quarter.
The company is predicting 1.7 trillion yen of net sales this fiscal year, also falling short of estimates.
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