At the 2022q1 performance presentation, Lam research showed that driven by the digital transformation of the global economy, the demand for wafer manufacturing equipment continued to increase. However, affected by the further intensification of supply chain shortage, the quarterly revenue in March 2022 decreased slightly compared with the previous quarter, and the backlog of orders increased for the sixth consecutive quarter.
Core content of the meeting
Supply chain shortages have intensified, and orders on hand have increased for six consecutive months. The company is accelerating the installation and improvement of more qualified equipment suppliers in the short-term supply chain. However, at the same time, the company said that although it responded to the challenge of continuously limiting production capacity in the supply chain, the demand was still strong. It had achieved the increase of on hand orders for the sixth consecutive quarter, and the visibility of terminal demand was very high. The company shipped the system to customers to accelerate equipment installation, but due to the lack of some key components, it was unable to complete revenue recognition in 22q1, and the balance of deferred revenue exceeded US $2 billion.
22q1 operating performance is in line with expectations, but at the lower limit of the guidelines. 22q1’s revenue was $4.06 billion, a slight decrease compared with the previous quarter; The gross profit margin is 44.7%, and the high cost pressure leads to the fluctuation of gross profit. The company believes that the supply chain problem has a negative impact on revenue and profitability. At the same time, in order to ensure the stable supply of key components required for equipment delivery, the company has led to an increase in expenditure. The continuous challenges of cost and supply constraints will continue to affect the performance in June quarter.
Logic’s revenue reached a new high, and the memory business remained strong. From the perspective of business classification, memory performed more strongly in the quarter of March, accounting for 66% of the system revenue. Higher than 58% in the previous quarter. The strong momentum of the memory market in this quarter mainly comes from DRAM business, which accounts for 27% of the system revenue. NAND accounted for 39%, foundry accounted for 21%, and logic / other hit a new high in revenue, accounting for 13%. CSBG declined month on month, mainly due to the delay of installation business caused by the shortage of supply chain. By region, China still accounts for the largest proportion, accounting for 31%, South Korea 24%, Taiwan, China 16%, Japan 9%, Oceania 9%, the United States 8%, and Europe 3%.
WFE demand in 2022 will exceed $100 billion. The company expects that the WFE demand in 2022 will exceed US $100 billion, and any unmet equipment demand will be deferred to next year. Although the supply chain shortage may limit the investment scale of wafer manufacturing equipment in 22 years, the long-term drivers of WFE expenditure have not changed, i.e. greater semiconductor usage at the terminal, increasing device complexity and larger chip area.
Investment advice
Due to the superposition of factors such as industrial transfer, equipment localization and high industry outlook, continue to recommend the recommended combination of semiconductor equipment sector: tuojing technology, shengmei Shanghai, Wuhan Jingce Electronic Group Co.Ltd(300567) , Advanced Micro-Fabrication Equipment Inc.China(688012) , Naura Technology Group Co.Ltd(002371) , Shanghai Wanye Enterprises Co.Ltd(600641) , Kingsemi Co.Ltd(688037) , Hangzhou Chang Chuan Technology Co.Ltd(300604) , Beijing Huafeng Test & Control Technology Co.Ltd(688200) , etc.
Main risks of rating
The uncertainty of geopolitical friction; Uncertainty of parts supply chain security.
