Summary of the Conference Call on Global Semiconductor Capital Equipment Industry Overview - The focus is on the **Wafer Fabrication Equipment (WFE)** market, particularly imports to **China**. - In **2025**, total WFE imports to China reached **$39.2 billion**, representing a **3% year-over-year (YoY)** increase, despite a **13% YoY** decline in December imports due to a high base effect from December 2024 [2][26][37]. Key Insights - **December 2025** saw WFE imports of **$4.5 billion**, marking the highest monthly figure for the year, with a **MoM increase of 84%** [2][3][26]. - **Lithography imports** hit a record high in December at **$2.3 billion**, primarily driven by demand from **Shanghai** and **Beijing** [3][27][35]. - The overall demand for WFE in China remains robust, particularly for **AI chip and memory production**, indicating a continued push for local production capabilities [3][68]. Company-Specific Insights ASML - ASML's China sales are projected to reach **EUR 3.14 billion** in Q4 2025, reflecting a **35% QoQ** and **64% YoY** increase, driven by high lithography imports [4][68][70]. - China is expected to account for **42%** of ASML's total system sales in Q4 2025, significantly higher than previous guidance [68][79]. Lam Research (LRCX) - December revenues for LRCX are expected to decline by **42% QoQ**, with China exposure estimated at **25%** of total revenues [6][90]. - The company anticipates that its China revenue exposure will fall below **30%** in 2026 [6][90]. Applied Materials (AMAT) - AMAT's January quarter revenues are projected to increase by **4% QoQ**, with China exposure remaining around **30%** [7][87]. Other Companies - **Tokyo Electron (TEL)** and **Kokusai** are also expected to see growth, with TEL benefiting from competitive pricing and Kokusai from increased adoption of batch ALD technology [17][20]. - **Screen** and **Advantest** are projected to experience declines in China revenue, with Screen's expected to drop **43% YoY** [11][12]. Import Trends - The **US, Singapore, and Malaysia** combined accounted for **35%** of WFE imports to China in 2025, while Japan's share decreased to **23%** [43][50]. - The share of lithography imports from the Netherlands has increased significantly since 2023, indicating a shift in sourcing strategies among global vendors [43][65]. Investment Implications - **NAURA**, **AMEC**, and **Piotech** are highlighted as outperformers in the domestic WFE market, benefiting from local demand and technological advancements [14][15][16]. - **ASML**, **LRCX**, and **AMAT** are also rated as outperformers, with strong growth prospects driven by ongoing demand in the semiconductor sector [19][20][21]. Conclusion - The WFE market in China is showing signs of resilience and growth, particularly in lithography, despite some expected declines in revenue for certain companies. The ongoing investments in local production capabilities for advanced technologies like AI chips and memory are likely to sustain demand in the coming years.

Summary of China Semiconductor Equipment Import Analysis Industry Overview - The report focuses on the semiconductor production equipment (SPE) industry in China, particularly analyzing import trends and demand dynamics in major cities like Shanghai and Beijing [1][4]. Key Highlights - **November 2025 SPE Imports**: Total SPE imports normalized to **US$2.1 billion**, reflecting a **10% YoY decrease** and a **29% MoM decline** from **US$2.98 billion** in October [1]. - **Year-to-Date (YTD) Performance**: Combined import demand for the first eleven months of 2025 reached **US$30.5 billion**, marking a **5% YoY increase** [1]. - **Regional Demand**: Shanghai and Beijing accounted for **67%** of total SPE imports in November, with Shanghai's imports at **US$902 million** (+179% YoY) and Beijing's at **US$525 million** (+41% YoY) [1]. Equipment Type Analysis - **Lithography Equipment**: - November litho imports totaled **US$707 million**, down **15% YoY** and **32% MoM**. However, litho accounted for **33%** of total imports, above the typical range of **20-25%** [2]. - Strong demand for litho suggests sustainable expansion activities in the long term [2]. - **Deposition Equipment**: Imports reached **US$414 million**, up **8% YoY**, driven by other deposition (+72% YoY) and CVD (+24% YoY) [2]. - **Etch Equipment**: Imports were **US$428 million**, down **32% YoY** [2]. Import Sources - The Netherlands and Japan were the top exporters to China, holding **29%** and **28%** market shares, respectively [2]. - Imports from the US accounted for only **4%** of total SPE imports [2]. Major Import Transactions - In November, Shanghai imported **nine litho tools** from the Netherlands for a total of **US$494 million** (average selling price of **US$55 million** per unit) [3]. - Accumulated litho imports from the Netherlands in Shanghai, Beijing, and Guangdong reached **US$3.2 billion**, with Shanghai showing a **71% YoY increase** [3]. Future Outlook - **WFE Spending Projections**: Expected growth of **10%** in 2026 and **1%** in 2027, following an **8%** growth in 2025, driven by advanced logic and memory capacity expansion projects [4]. - **Top Picks**: NAURA is highlighted as a key buy, with buy ratings also on AMEC and ACMR Shanghai [4]. Risks and Considerations - **Downside Risks**: Include potential macroeconomic downturns, geopolitical tensions, and slower-than-expected R&D progress [48]. - **Upside Risks**: Faster-than-expected demand recovery and aggressive capex plans from domestic fabs could enhance market conditions [48]. Conclusion - The analysis indicates a mixed but cautiously optimistic outlook for the semiconductor equipment sector in China, with significant regional demand and potential for growth in WFE spending, despite existing risks.

Summary of Key Points from the Conference Call on Global Semiconductor Capital Equipment Industry Overview - The focus is on the **Wafer Fabrication Equipment (WFE)** market, particularly imports to **China**. - The data indicates a **year-to-date (YTD)** increase of **7%** in WFE imports to China as of October 2025, reflecting strong demand in the region [2][34]. Import Data Highlights - **October 2025** WFE imports to China totaled **USD 3.23 billion**, showing a **month-over-month (MoM)** decrease of **35%** but a **year-over-year (YoY)** increase of **11%** [2][23]. - The **YTD total** for WFE imports reached **USD 32.2 billion**, maintaining a **YoY growth of 7%** [24]. - The largest segment of imports in October was **Lithography**, accounting for **USD 1.03 billion** (32% of total imports), with a **YoY increase of 90%** [24][57]. Equipment Type Performance - **Lithography**: MoM decrease of **25%**, YTD YoY decrease of **10%** [3][24]. - **Deposition**: MoM decrease of **42%**, YTD YoY increase of **13%** [3][24]. - **Dry Etch**: MoM decrease of **27%**, YTD YoY increase of **58%** [3][24]. - **Process Control**: MoM decrease of **66%**, YTD YoY increase of **11%** [3][24]. Regional Insights - The share of imports from **US, Malaysia, and Singapore** increased to **38%** YTD, up from **33%** last year, while Japan's share decreased to **23%** from **26%** [3][42]. - **Shanghai** and **Guangdong** accounted for **58%** of total imports YTD [3]. Company-Specific Insights - **ASML**: Expected to see **China sales** reach **EUR 2.55 billion** in Q4, up **9% sequentially** and **33% YoY**, driven by strong lithography imports [4][68]. - **LRCX**: Anticipated **China revenues** to decrease by **28% QoQ** in December, with China exposure at **32%** of total revenues [5][87]. - **AMAT**: Reported a **23% QoQ decline** in China revenues, with actual exposure at **29%**, lower than regression estimates [6][90]. - **TEL**: Projected a **17% YoY decline** in China revenue [8]. - **Screen**: Expected a significant **84% YoY decline** in China revenue [9]. Investment Implications - **NAURA**: Rated **Outperform** with a target price of **CNY 480.00**, benefiting from domestic WFE substitution in China [12]. - **AMEC**: Rated **Outperform** with a target price of **CNY 380.00**, recognized for its technology and market share gains [13]. - **Piotech**: Rated **Outperform** with a target price of **CNY 375.00**, noted for product innovation [14]. - **Tokyo Electron**: Rated **Outperform** with a target price of **¥39,400**, expected to gain market share [15]. - **Advantest**: Rated **Market-Perform** with a target price of **¥20,400**, benefiting from increased testing intensity [16]. Conclusion - The WFE market in China shows robust demand despite some month-over-month declines, with significant implications for major players in the semiconductor equipment sector. The data suggests a complex landscape with varying performance across different equipment types and companies, highlighting both opportunities and challenges in the market.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Global Semiconductor Capital Equipment - **Focus**: Wafer Fabrication Equipment (WFE) imports to China Core Insights and Arguments - **August 2025 WFE Imports**: Total imports reached USD 3,010 million, showing a year-over-year increase of 12% but a month-over-month decrease of 20% [2][25] - **Year-to-Date Performance**: Year-to-date imports are up 3% compared to the previous year, indicating a potential flat year overall [2][25] - **Lithography Segment Growth**: Lithography imports grew by 55% year-over-year in August, while other segments remained mostly flat [3] - **Vendor Performance**: U.S. vendors (including Malaysia and Singapore) captured approximately 38% of the market share, up from 33% in 2024, driven by Malaysia's increased share [3] - **Japan's Market Share**: Japan's share of WFE imports remains weak at 24% year-to-date, down from an average of 26% last year, due to unfavorable foreign exchange conditions and delayed purchases [3] Company-Specific Insights - **ASML**: Estimated China lithography imports for Q3 at EUR 2.17 billion, a 44% increase quarter-over-quarter but a 22% decrease year-over-year. China sales are expected to represent 38% of overall system revenue, up from 27% in Q2 [4][66] - **LRCX (Lam Research)**: Predicted a 14% increase in China revenues for Q3, with China exposure expected to be around 40% of total revenues [5][79] - **AMAT (Applied Materials)**: Anticipated a 12% decrease in China revenues for Q4, with China exposure around 33% of total revenues [6][88] - **TEL (Tokyo Electron)**: Expected a 12% year-over-year increase and a 23% quarter-over-quarter increase in China revenue [8] - **Kokusai**: Projected a significant increase in China revenue, up 58% year-over-year and 54% quarter-over-quarter [9] - **Screen**: Expected a decline in China revenue, down 11% year-over-year but up 16% quarter-over-quarter [10] - **Advantest**: Anticipated a further decline in China revenue, down 41% year-over-year and 35% quarter-over-quarter [11] Investment Implications - **NAURA**: Rated as outperform with a target price of CNY 450.00, benefiting from domestic WFE substitution in China [13] - **AMEC**: Rated as outperform with a target price of CNY 300.00, recognized for its technology and market position [14] - **Piotech**: Rated as outperform with a target price of CNY 300.00, noted for product innovation and market share gains [15] - **AMAT**: Positive outlook on WFE growth, driven by market expansion and capital returns [18] - **LRCX**: Supportive commentary for CY25, indicating a potential NAND upgrade cycle [19] - **ASML**: Cautious stance on growth, with revenue forecasts aligning with lower guidance [20] Additional Important Insights - **China's Role in WFE Market**: China is increasingly significant in the global WFE market, with global vendors capturing about 84% of the market share in 2024 [21] - **Import Trends**: The data indicates a shift in production for U.S. vendors, with increased imports from Singapore and Malaysia [38][46] - **Lithography Imports**: The share of lithography imports from the Netherlands has increased significantly since 2023, reflecting changes in supply chain dynamics [60][62] This summary encapsulates the key points discussed in the conference call, highlighting the current state of the semiconductor capital equipment industry, company-specific forecasts, and broader market trends.

Summary of the Global Semiconductor Capital Equipment Conference Call Industry Overview - The focus is on the **Wafer Fabrication Equipment (WFE)** market in China, with a specific update on **May 2025** import data indicating resilience despite a year-to-date (YTD) year-over-year (YoY) decline of **2%** [2][22]. Key Insights - **May 2025 WFE Imports**: Total imports reached **USD 2,829 million**, reflecting a month-over-month (MoM) decline of **16%** and a YoY decline of **1%**. The YTD average import is **USD 2,773 million**, slightly lower than the previous year's average of **USD 3,159 million** [2][22]. - **Import Segmentation**: The largest segments for imports are **Deposition (26%)**, **Dry Etch (21%)**, and **Lithography (12%)**. Japan remains the largest trading partner, accounting for **25%** of imports, while Guangdong and Shanghai are the biggest domestic buyers, with shares of **37%** and **22%**, respectively [3][22]. Company-Specific Insights - **Tokyo Electron (TEL)**: Expected to see a **12% QoQ** increase in China revenue, with a projected **-10% YoY** decline for FY26/3. China is anticipated to contribute **42%** of total revenues [4][62][63]. - **Kokusai**: Forecasted to experience a **-32% QoQ** decline in China revenue, with an expected contribution of **37%** to total revenues [4][66][70]. - **Screen**: Anticipated to decline by **-27% QoQ** in China revenue, with a contribution of **30%** to total revenues, below the company's guidance of **45%** [5][73][79]. - **Advantest**: Expected to see a significant decline of **-60% QoQ** in China revenue, with exposure dropping to **8%** from **19%** in the previous quarter [5][82]. Market Dynamics - The **lithography segment** is experiencing a sharp decline, with imports expected to drop to **EUR 0.79 billion** in Q2, down **66% YoY** and **49%** sequentially. This is attributed to record low import levels in April and May [9]. - The overall WFE market in China is becoming increasingly important, with global vendors capturing approximately **84%** of the market share in 2024 [18]. Investment Implications - **NAURA**: Rated as **Outperform** with a target price of **CNY 550.00**, benefiting from a broad product portfolio and diverse client base [11]. - **AMEC**: Also rated **Outperform** with a target price of **CNY 300.00**, recognized for its technology and market position [12]. - **Piotech**: Rated **Outperform** with a target price of **CNY 280.00**, noted for its innovation in advanced packaging [13]. - **AMAT**: Positive outlook with a target price of **$210.00**, driven by secular WFE growth and capital return [16]. - **ASML**: Rated **Market-Perform** with a target price of **EUR 700.00**, reflecting a cautious stance on growth relative to consensus [17]. Additional Observations - The **import data** indicates a shift in sourcing, with increased imports from **Singapore and Malaysia** as U.S. direct imports decline [34][40]. - The **market for cleaning equipment** remains competitive, with potential upside from panel-level packaging [15]. This summary encapsulates the key points from the conference call, highlighting the current state of the WFE market in China, company-specific forecasts, and broader market dynamics.