Japanese Chip Gear Supplier Eyes Rebound in Flash Memory Orders

(Bloomberg) -- Screen Holdings Co., a Japanese maker of semiconductor manufacturing equipment, is seeing signs of a rebound in demand from flash memory makers, while DRAM manufacturers hold back spending.

A slump in overall orders for chip gear in the three months ended June 30 will be short-lived, followed by a rebound over the next two quarters and a dip in the final one, Screen President Toshio Hiroe said in an interview. The company expects full-year orders and sales in the business to be little changed from the last fiscal period, with demand from Taiwanese foundries helping to offset sluggish spending by DRAM makers.

“The conditions in the Nand market are looking good and chipmakers are beginning to invest in preparation for future demand,” Hiroe said. “DRAM recovery has been slow going.”

Chipmakers and their suppliers have faced an uneven recovery as the coronavirus pandemic spurred demand for home computing equipment even as the global economic downturn hurt spending elsewhere. Screen, whose customers include Taiwan Semiconductor Manufacturing Co. and Intel Corp., reported a 28% drop in orders for semiconductor production equipment during the June quarter.

Screen, the world’s biggest maker of silicon wafer cleaning equipment, is looking to grow revenue in the business by as much as 30% over the next four years. The company, which already controls about 80% of the market for the most advanced cleaners, is developing new machines to expand its share of less cutting-edge chip processes, Hiroe said, declining to give further detail. Its competitors in this business include chip gear giant Tokyo Electron Ltd., Lam Research Corp. and Chinese manufacturers.

“Getting to those mid-term targets will depend on them achieving market shares gains,” said Damian Thong, an analyst at Macquarie Group Ltd. “The equipment market is competitive, so this will be no mean feat.”

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