Japanese semiconductor equipment companies gained share in 2011

NEW TRIPOLI, USA: Although the Yen decreased more than 9 percent against the dollar between 2010 and 2011, many Japanese companies were still able to increase their market share against US and European suppliers, except of course the Lithography sector that ASML dominated.

In Plasma Etch, for example, TEL increased its share of the more than $4 billion sector from 23.5 percent in 2010 to 26.3 percent in 2011 as measured in US Dollars. Hitachi High Tech more than doubled its share, which increased from 5.7 percent in 2010 to 11.8 percent in 2011.

In Physical Vapor Deposition (PVD), Ulvac increased its share of the $1.5 billion sector from 8.4 percent in 2010 to 11.5 percent in 2011.

In Rapid Thermal Processing (RTP)/diffusion, Hitachi Kokusai increased its share of the $1 billion sector from 7.9 percent in 2010 to 9.4 percent in 2011.

So, why does this all matter? We forecast that the semiconductor equipment market will drop as much as 10 percent in 2012. So far, the Yen/USD exchange average has not depreciated against the dollar, meaning revenues based on the US dollar can increase an additional 10 percent if we use the 2010 exchange basis. For example, Ulvac's semiconductor equipment revenues increased 28 percent in Yen but 41.3 percent in Dollars. A weak Yen makes Japanese pricing more attrractive.

Semiconductor sales are projected to grow only about 2 percent in 2012, but so far this year semiconductor sales are still dropping. While capex announcements from companies such as Intel, Samsung, and TSMC are in the stratosphere, overall capex is still projected to decrease about 10-12 percent.

Bottom line, 2011 could be another year of share gains for Japanese semiconductor equipment manufacturers at a time when the overall equipment market is down.