What They Say
DSCC published some highlights of its Quarterly Display Supply Chain Financial Health Report and found that the leading equipment makers have seen revenues fall by 34% year on year in Q2 2022 to $1.5 billion, with double digit falls in the last four quarters after four boom quarters from Q3 2020. However, the firm sees some signs of improvement with planned fab installs at
- BOE B12;
- China Star T9;
- EDO Fab 2;
- HKC H5;
- LGD AP4/E6 although DSCC hasd seen a number of delays to Q4’22;
- Sharp SIO
That could see Q3 revenues rebound to 128% Q/Q growth in Q3 (to $3.42 billion by our reckoning). AMAT, Ulvac and Canon stayed top with Canon apparently early installing an FMM vertical evaporation (VTE) tool at Everdisplay Optronics (EDO). The article has more details on company shares.
Display makers saw their capex fall to $5.0 billion, up 4% YoY with BOE at $1.3 billion and both CSOT and LGD over $1 billion.
Despite the fall in the size of the market, margins for the top equipment makers remained positive although net margins fell from 15.0% to 14.7%. New equipment order bookings were down 5% year on year. Liquidity is not an issue for firms, DSCC said.
What We Think
As we have reported before (DSCC Updates Display Equipment Spending Forecast – Higher Tandem FMM VTE Prices Help to Minimize Drop), although Q3 may improve, there is a tricky year ahead in 2023 as capex drops substantially overall next year. (BR)
