US Semiconductor Equipment_ SPIE Litography 2025 - Key Takeaways

Summary of US Semiconductor Equipment Conference Call Industry Overview - The conference focused on the US Semiconductor Equipment industry, specifically highlighting insights from KLA and Applied Materials during the SPIE Lithography & Patterning Conference in February 2025 Key Points from KLA - Market Dynamics: KLA expressed optimism for 2025, noting that the wafer fabrication equipment (WFE) market is composed of 65% logic and foundry segments. Sales in China have decreased and been derisked, while the leading-edge foundry business, particularly with TSMC, remains robust. However, legacy foundry growth outside of China is stagnant [2][4] - Service Growth: KLA anticipates some pressure on service growth this year due to the loss of fabs in China, but remains confident in long-term growth as the industry becomes more efficient [2] - Advanced Packaging: The company is experiencing strong momentum in advanced packaging, aiming for $800 million in sales in 2025, up from$500 million in 2024. KLA does not foresee a decline in the first half of 2025, unlike some peers, due to its high exposure to logic [2][4] - E-beam Technology: KLA entered the e-beam space three years ago, focusing on increasing optical relevance. E-beam systems are expected to play a significant role in the future, despite current production challenges [3] - Patterning and Inspection: KLA noted that patterning is driven by metrology and is more volatile. The company expects to gain market share in reticle inspection, with a 60% contribution from GAA PDC intensity and 40% from share gains [4] - Competitive Landscape: KLA faces competition primarily from Dutch and Japanese companies in China, with a limited number of suppliers in the PDC space helping to mitigate local competition [5] Key Points from Applied Materials - E-beam Adoption: Applied Materials reported an increase in e-beam adoption among logic customers, with review samples growing significantly. E-beam technology complements optical inspection, particularly in advanced packaging [6][8] - Sales Performance: The company’s e-beam sales are part of a larger $1.7 billion total in packaging and high-bandwidth memory (HBM) sales [9] - Metrology and Inspection: There is an increasing intensity in both metrology and inspection for leading-edge logic, driven by higher sensitivity requirements [10] Additional Insights - Market Trends: The overall share at the 2nm node is approximately 100 basis points higher than the overall WFE, indicating a competitive edge for KLA in advanced technology nodes [4] - Future Outlook: Both companies are optimistic about the future, with KLA focusing on increasing its share in logic and Applied Materials enhancing its e-beam technology capabilities [2][6] This summary encapsulates the critical insights and projections from the conference call, highlighting the current state and future outlook of the US Semiconductor Equipment industry.