Top 5 Wafer Fab Equipment Makers’ Revenue Declined in 2023

Top 5 wafer fab equipment (WFE) manufacturers’ revenue declined 1% YoY in 2023 to reach $93.5 billion, according to Counterpoint Research. Weak memory spending, macroeconomic slowdown, inventory adjustments, and low demand in the smartphone and PC end markets caused the drop.

Out of these five WFE vendors, ASML and Applied Materials managed to post YoY growth in 2023 while Lam Research, Tokyo Electron, and KLA’s revenues declined 25%, 22%, and 8% respectively. Strong DUV and EUV sales drove ASML to the top position in 2023. Inventory adjustments and memory downtrends had a significant impact on the overall revenue in 1H23. However, inventory normalization and demand uptick in DRAM in 2H23 helped restrict the overall full-year revenue decline.

Revenue from the foundry segment grew 16% YoY in 2023 due to the ramping up of gate-all-around transistor architecture and strength in investments by customers for mature node devices across segments, including IoT, AI, cloud, automotive, and 5G. Revenue from the memory segment declined 25% YoY due to weak overall memory WFE spending, especially NAND. However, the decline was checked by the strength in DRAM in the latter half of 2023.

A big push for self-sufficiency in China, increased trailing-edge DRAM shipments, DRAM demand, and mature-node growth investments drove a 31% YoY increase in shipments to China, which accounted for around one-third of total system sales in 2023. Gate-all-around technology ramp-up; growth in AI, automotive, and IoT spending; new fabs becoming operational; DRAM technology node transition to support HBM; and improved NAND spending will drive the WFE market’s growth in 2024.