Summary of AMEC (A) Conference Call Company Overview - **Company**: Advanced Micro-Fabrication Equipment Inc. (AMEC) - **Sector**: Semiconductor Capital Equipment - **Founded**: 2004 - **Headquarters**: Shanghai, China - **Core Business**: Manufacturing etching equipment and other semiconductor equipment Key Points Industry Dynamics - **Wafer Fabrication Equipment (WFE) Demand**: - Expected to remain robust at over US$30 billion annually, with projections of US$32 billion in 2023 and US$38 billion in 2024 due to domestic fabs' capacity expansion and demand pull-in from trade concerns [16][44] - Long-term demand forecasted to stabilize at US$34-35 billion per year from 2026 to 2028 [45] Company Performance and Projections - **Market Position**: - AMEC holds approximately 15% of the China etching tool market as of 2024, with expectations to increase to over 20% by 2027 [2] - Global market share is around 6% [17] - **Revenue Growth**: - Projected revenue CAGR of 28% from CNY 12 billion in 2025 to CNY 20 billion in 2027 [3] - Expected operating profit margin to normalize to 20% by 2027, up from 11% in 2025 [3] - **Earnings Per Share (EPS)**: - Estimated EPS of CNY 4.86 in 2026 and CNY 6.87 in 2027, representing a 45% CAGR from CNY 3.26 in 2025 [3] Product Development and Strategy - **Product Diversification**: - AMEC is expanding into deposition and process control markets, which account for approximately 23% and 13% of the WFE market, respectively [18] - Development of new products such as CVD/ALD equipment for logic chips and MOCVD for compound semiconductors [18] - **Platformization Strategy**: - Aimed at supporting continuous revenue growth and profitability improvement [13][15] Financial Metrics - **Valuation**: - Price Objective (PO) set at CNY 352, indicating a 22% upside potential from the current price of CNY 289.20 [1][7] - Target P/E ratio of 60x based on 2026-27 average EPS of CNY 5.86 [33] - **Key Financial Estimates**: - Net Income (Adjusted) projected to grow from CNY 1.786 billion in 2023 to CNY 4.322 billion in 2027 [4] - Free Cash Flow expected to improve significantly, reaching CNY 5.39 per share by 2027 [4] Risks and Challenges - **Downside Risks**: - Potential slowdown in WFE demand and intensified competition [1][42] - Higher R&D costs impacting revenue growth and margins [43] - Trade restrictions affecting equipment supply and production capabilities of local chipmakers [43] - **Upside Risks**: - Faster-than-expected capacity building by local fabs and tighter overseas equipment supply could enhance market share for AMEC [42] Conclusion - AMEC is positioned to benefit from strong demand in the semiconductor equipment sector, particularly in China, with a solid growth outlook driven by its market position, product diversification, and strategic initiatives. However, it faces risks from competition and external market conditions that could impact its performance.

Summary of China Semiconductor Equipment Imports - September 2025 Industry Overview - **China's Semiconductor Equipment Imports**: In September 2025, semiconductor equipment imports reached $7.1 billion, marking a **42% year-over-year (yoy)** increase and a **68% month-over-month (mom)** increase. This is significantly above the previous three-month average of $4.7 billion and the twelve-month average of $4.5 billion. The year-to-date (YTD) growth for 2025 stands at **9%** [1][53][55]. Key Categories of Imports Front-end Equipment - **Total Imports**: Front-end equipment imports totaled **$5.0 billion** in September, up **28% yoy** and **65% mom**. Key drivers included: - **Process Control**: $750 million, **+123% yoy** and **+95% mom** - **Etching**: $963 million, **+79% yoy** and **+72% mom** - **Deposition**: $1,043 million, **+67% yoy** and **+81% mom** - **Other Front-end**: $543 million, **+60% yoy** and **+16% mom** - **YTD Performance**: Front-end imports for the year reached **$29 billion**, up **7% yoy** [2][3][36]. Back-end Equipment - **Assembly & Packaging**: $485 million, **up 19% yoy** and **up 76% mom**. Notable increases in wire bonder imports and mounting/bonding equipment. - **Wafer Manufacturing**: $103 million, **down 29% yoy** and **down 27% mom**. - **Flat Panel Display**: $965 million, **up 473% yoy** and **493% mom**. - **Spares**: $548 million, **up 40% yoy** but **down 10% mom**. - **Testing**: $57 million, **up 32% yoy** and **up 137% mom** [8][41]. Trends and Insights - **Lithography Imports**: Down **17% yoy** but up **84% mom**. The average selling price (ASP) for lithography machines was **$18.1 million**, significantly higher than the previous average of **$11.4 million** [80][99]. - **Market Share**: In 2024, China accounted for **36.2%** of the global wafer fabrication equipment (WFE) market, highlighting its importance in the global semiconductor landscape [69][70]. - **Country of Origin**: Japan and the Netherlands accounted for **41%** of semiconductor equipment imports into China through September 2025, with Japan holding a **26%** share [67][74]. Potential Risks and Opportunities - **Normalization of Sales**: Most semiconductor equipment suppliers anticipate that sales in China will normalize in 2025, which could impact future growth rates [1]. - **Dependence on Key Suppliers**: The top five semiconductor equipment suppliers' disclosed sales accounted for **76%** of front-end imports in Q3 2025, indicating a concentrated market [77][78]. Conclusion The semiconductor equipment import data for September 2025 indicates robust growth in several categories, particularly in front-end equipment and flat panel displays. However, challenges remain, particularly in lithography and wafer manufacturing segments, which may require strategic adjustments from suppliers to maintain growth momentum in the Chinese market.

Summary of Semiconductor Equipment Imports in China - August 2025 Industry Overview - China's semiconductor equipment imports in August 2025 totaled **$4.2 billion**, reflecting a **15% year-over-year (yoy)** increase but a **18% month-over-month (mom)** decrease. This marks a continuation of the year-to-date (YTD) positive growth of **4%** for 2025, with expectations for normalization in sales for most semiconductor equipment suppliers in China [1][59][61]. Key Import Data - **Front-end Equipment**: - Imports amounted to **$3.0 billion**, up **12% yoy** but down **20% mom**. Key segments included: - **Lithography**: **$750 million** (+55% yoy, -8% mom) - **Other Front-end**: **$469 million** (+27% yoy, +11% mom) - **Process Control**: **$385 million** (+15% yoy, -4% mom) - **Etching**: **$558 million** (+2% yoy, -35% mom) - **Heat Treatment**: **$153 million** (+1% yoy, -10% mom) - **Ion Implanters**: **$118 million** (-34% yoy, -40% mom) - **Deposition**: **$576 million** (-6% yoy, -36% mom) [2][3][8]. - **YTD Front-end Imports**: Totaled **$24.0 billion**, up **3% yoy**. Notable increases were seen in: - **Etching**: **$5.0 billion** (+47% yoy) - **Deposition**: **$5.6 billion** (+8% yoy) - **Other Front-end**: **$3.3 billion** (+9% yoy) - **Process Control**: **$2.8 billion** (+5% yoy) - However, declines were noted in **Lithography** (-17% yoy), **Heat Treatment** (-22% yoy), and **Ion Implanters** (-21% yoy) [3][8]. Category Breakdown - **Assembly & Packaging**: - Imports were **$275 million**, down **24% yoy** and **24% mom**. Wire bonder imports decreased by **36% yoy** and **30% mom**, while mounting and bonding increased by **44% yoy** and **5% mom**. YTD, A&P is up **1% yoy** to **$2.9 billion** [8]. - **Wafer Manufacturing**: - Imports reached **$141 million**, up **10% yoy** but down **28% mom**. YTD imports are up **6% yoy** to **$1.1 billion** [8]. - **Flat Panel Display**: - Imports totaled **$163 million**, up **34% yoy** but down **13% mom**. YTD, imports are down **2% yoy** to **$1.5 billion** [8]. - **Spares**: - Imports were **$610 million**, up **75% yoy** but down **2% mom**. YTD, spares are up **20% yoy** to **$3.9 billion** [8]. - **Testing**: - Imports were **$24 million**, down **41% yoy** and **48% mom**. YTD, testing imports are down **18% yoy** to **$314 million** [8]. Market Insights - China accounted for **36%** of global wafer fabrication equipment (WFE) in 2024, highlighting its significance in the global semiconductor market [1][70]. - The **Netherlands** was a major supplier, with lithography machines from the Netherlands accounting for **86%** of all lithography imports in August 2025 [85]. - The average selling price (ASP) of lithography machines was **$11.5 million** in August 2025, above the previous 12-month average of **$11.1 million** [105]. Supplier Comments - **Applied Materials**: Anticipates lower revenues and earnings due to uncertainties in the China market, with a projected decrease in China’s contribution to total revenue [81]. - **ASML**: Expects China to account for over **25%** of total revenue, indicating stronger than previously expected demand [81]. - **Lam Research**: Projects WFE spending to be around **$105 billion**, with a notable increase in domestic China-related spending [81]. Conclusion - The semiconductor equipment market in China is experiencing mixed signals, with certain segments showing growth while others decline. The overall trend indicates a normalization in sales, with significant contributions from key suppliers and a focus on specific equipment categories. The data suggests potential investment opportunities in segments with positive growth trajectories, such as etching and spares, while caution is advised in areas experiencing declines.