Latest news with #ToshikiKawai
Japan Times
10 hours ago
- Business
- Japan Times
Tokyo Electron shrugs off fears of Chinese rivals catching up
Tokyo Electron is on course to widen its lead against Chinese chip tool makers despite the billions of dollars Beijing is mobilizing to catch up, according to the Japanese company's chief. Toshiki Kawai shrugged off concerns about rising competition from China, adding that investors haven't adequately priced in Tokyo Electron's leadership in making machines that help process silicon into artificial intelligence chips. Technology at the Japanese company, whose main competitor is Applied Materials, is advancing at a pace that's faster than its Chinese rivals', due in part to close collaboration with contract chipmakers, the chief executive officer said. "We have access to cutting-edge wafers, and our ability to provide cutting-edge process technology will become overwhelmingly faster than Chinese makers,' Kawai said in an interview. "Because we have such a strong lineup of products, Tokyo Electron can be in alignment with a technology roadmap that spans 10 years alongside the world's leading device makers.' That roadmap covers roughly four generations of chip processing technology and represents significant potential for further growth as the pace of innovation accelerates, he said. "The gap will continue to widen.' Kawai's confidence is in the face of a national push in China to work around U.S.-led export restrictions on chipmaking knowhow. China's Advanced Micro-Fabrication Equipment, Naura Technology Group and Shanghai Micro Electronics Equipment Group are spending heavily to develop cutting-edge chip equipment. That's while customers like Semiconductor Manufacturing International and Hua Hong Semiconductor have been buoyed by pressure from Beijing on its tech sector to source more chips from domestic manufacturers. To maintain its leadership, Tokyo Electron plans to invest ¥1.5 trillion ($10.5 billion) in research and development and hire 10,000 engineers over the next five years — or about 2,000 every year — to bring up the total number of employees to more than 30,000. More than 25,000 college graduates applied for 500 positions this year. The company's shares remain weighed down by fears about rising competition and its exposure to China, however. A series of U.S.-led measures to limit China's ability to obtain chip gear and services are making investors fearful that the Tokyo company — which earned almost half of its revenue in China at one point last year — may suddenly be forced to halt its business with Chinese customers, Bloomberg Intelligence analyst Masahiro Wakasugi said. Tokyo Electron's shares are down around 25% from a year ago. "We are not at all satisfied with our current market cap,' Kawai said, adding that the company targets a dividend payout ratio at more than 50% and plans to implement flexible share buybacks. Tokyo Electron was among the top five most valuable companies on the Tokyo Stock Exchange during most of April last year. The company would work to regain that standing, he said. Customers investing in an AI hardware boom are more than making up for any declines in China and lowering Tokyo Electron's reliance there, Kawai said. Revenue from China is expected to settle at around 30% of total sales, down from less than 40% in the second half of last fiscal year, he said. The company is on course to hit its target operating profit of at least ¥1 trillion on sales of more than ¥3 trillion revenue by 2027, Kawai said. Tokyo Electron generated ¥697 billion operating profit on revenue of ¥2.4 trillion in the just-ended fiscal year. The company's exposure to potential U.S. tariffs is also limited as it earns just 8% of total revenue from America, and there's no foreign exchange rate fluctuation risks because the company transacts in yen with customers, he said. Nor has demand for chip tools fallen with the emergence of cheaper AI models such as DeepSeek, he said. "Even as various AI solutions emerge, the demands don't change,' he said. "Tokyo Electron is always pursuing the latest cutting-edge technology, so we believe there will be no issues with our growth.'
Bloomberg
16 hours ago
- Business
- Bloomberg
Tokyo Electron Shrugs Off Fears of Chinese Rivals Catching Up
Tokyo Electron Ltd. is on course to widen its lead against Chinese chip tool makers despite the billions of dollars Beijing is mobilizing to catch up, according to the Japanese company's chief. Toshiki Kawai shrugged off concerns about rising competition from China, adding that investors haven't adequately priced in Tokyo Electron's leadership in making machines that help process silicon into artificial intelligence chips. Technology at the Japanese company, whose main competitor is Applied Materials Inc., is advancing at a pace that's faster than its Chinese rivals', due in part to close collaboration with contract chipmakers, the chief executive officer said.
Yahoo
06-02-2025
- Business
- Yahoo
Tokyo Electron Plans Expansion Despite AI Spending Doubts
(Bloomberg) -- Tokyo Electron Ltd. reaffirmed its annual outlook and outlined plans to build a ¥104 billion ($681 million) plant, suggesting it expects sustained AI spending. Citadel to Leave Namesake Chicago Tower as Employees Relocate State Farm Seeks Emergency California Rate Hike After Fires Transportation Memos Favor Places With Higher Birth and Marriage Rates San Francisco Wants Wealthy Donors to Help Fix Fentanyl Crisis NY Transit Advocate Says Billions in Tax Hikes Would Fix MTA The company, one of a handful of key chip gear makers globally, revealed that expansion after posting better-than-expected earnings. The Japanese supplier to Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. brought in operating profit of ¥199.6 billion in the December quarter from sales of machines used to prepare, etch and clean silicon wafers that are ultimately cut into memory or logic chips. That was up 51% from the previous year and compares with the average of analyst estimates of ¥174 billion. Closely watched as an indicator of future spending on chips used for artificial intelligence development, Tokyo Electron did not hike its outlook, as compatriot Advantest Corp. did a week earlier. Indications from supply chain players have been mixed, as Dutch lithography supplier ASML Holding NV reported a surprisingly high number of orders while Arm Holdings Plc and Advanced Micro Devices Inc. gave cautious forecasts that added to doubts about the sustainability of the free-spending trend in the market. Tokyo Electron's move to expand capacity with a plant in Miyagi prefecture, northeast Japan, reflects demand from customers such as Samsung, TSMC and SK Hynix Inc., which have indicated they'll continue elevated spending on tools used to process wafers into semiconductors. Much of the investment in 2025 will come from cutting-edge logic makers and high-bandwidth memory makers hurrying to meet AI server demand, Tokyo Electron Chief Executive Officer Toshiki Kawai said on an earnings call. That's while the company expects a lull in chip gear purchases by Chinese customers, especially among new entrants to chipmaking, he said. China is expected to comprise a percentage in the mid-thirties of Tokyo Electron's sales in the business year starting April, down from more than 40% in the current fiscal year, he said. 'We can't deny that we've been affected' by US restrictions on exports of chip-related technologies and other geopolitical factors, Kawai said. Chinese startup DeepSeek's low-cost and open-source AI model is raising concern that the tech sector will face far more price competition and less revenue for the likes of Nvidia Corp. than previously predicted. Still, AI industry leaders have argued that cheaper AI models would mean more new entrants that would further support demand for AI infrastructure over the long term. Tokyo Electron is still evaluating DeepSeek and its impact, Finance Division Officer Hiroshi Kawamoto said during an earnings call. If lower-cost AI leads to an expansion of the market, it's a positive, he said. 'It's too soon for us to say.' (Updates with executive comments from the fourth paragraph.) Orange Juice Makers Are Desperate for a Comeback Believing in Aliens Derailed This Internet Pioneer's Career. Now He's Facing Prison Inside Elon Musk's Attack on the US Government Amazon and SpaceX Want In on India's Satellite Internet Market Elon Musk Inside the Treasury Department Payment System ©2025 Bloomberg L.P. Sign in to access your portfolio
