China’s push for self-sufficiency increased shipments of trailing-edge DRAM, accounting for one-third of total system sales in 2023.
The revenue of the top five wafer fab equipment (WFE) manufacturers experienced a slight decline of 1% year-on-year (YoY) to reach $93.5 billion, in 2023. This decrease was attributed to weak memory spending, macroeconomic slowdown, inventory adjustments, and low demand in the smartphone and PC end markets.
Among these top five WFE vendors, Advanced Semiconductor Materials Lithography (ASML) and Applied Materials recorded YoY growth in 2023, while Lam Research, Tokyo Electron, and KLA saw their revenues decline by 25%, 22%, and 8% YoY, respectively. Strong sales of deep ultraviolet (DUV) and extreme ultraviolet (EUV) equipment propelled ASML to the top position in 2023.
The revenue impact was particularly significant in the first half of 2023 due to inventory adjustments and downtrends in memory. Inventory normalisation and an uptick in demand for DRAM in the second half of the year helped mitigate the overall full-year revenue decline.
The foundry segment witnessed a 16% YoY growth in revenue in 2023, driven by the ramp-up of gate-all-around transistor architecture and strong investments by customers in mature node devices across various segments, including the Internet of Things (IoT), artificial intelligence (AI), cloud computing, automotive, and 5G.
The memory segment experienced a 25% YoY decline in revenue, primarily due to weak overall memory WFE spending, especially in NAND. Nonetheless, this decline was offset by the strength in DRAM in the latter half of 2023. A significant push for self-sufficiency in China, increased shipments of trailing-edge DRAM, growing DRAM demand, and investments in mature-node growth led to a 31% YoY increase in shipments to China, which accounted for approximately one-third of total system sales in 2023.
Looking ahead to 2024, the WFE market is expected to grow due to factors such as the ramp-up of gate-all-around technology, increased spending in AI, automotive, and IoT, the operationalisation of new fabs, the transition of DRAM technology nodes to support High Bandwidth Memory (HBM), and improved spending on NAND.
