Lam Research, ASML Lead Surge In Revenue From China Despite US Trade Curbs
Portfolio Pulse from Anusuya Lahiri
Chipmaking equipment manufacturers like Lam Research and ASML are seeing a surge in revenue from China, which accounts for over 40% of their sales, despite U.S. trade restrictions. Lam Research reported nearly half its revenue from China, while ASML, despite a ban on its most advanced systems, also saw significant Chinese sales. Applied Materials experienced elevated sales in China and anticipates a return to the typical 30% level over time. Industry experts warn that China's strategy to front-load orders may not be sustainable, and stricter export rules could impact future growth. A U.S. criminal investigation into Applied Materials for alleged export violations has raised concerns, affecting its stock and peers like KLA Corp and Lam.
November 17, 2023 | 1:39 pm
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POSITIVE IMPACT
ASML Holding NV saw a high proportion of its revenue come from China, despite a ban on shipping its most advanced systems there.
ASML's revenue resilience in the face of U.S. bans suggests a positive short-term outlook, but the situation could change if restrictions tighten further.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
Lam Research Corp reported nearly half of its revenue from China, indicating strong sales despite U.S. trade restrictions.
The significant revenue from China suggests robust demand for Lam Research's products, which could lead to a positive short-term impact on the stock price. However, potential future restrictions and the current U.S. investigation could pose risks.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
NEUTRAL IMPACT
Applied Materials reported significant sales in China and expects elevated sales to continue, but faces a U.S. criminal investigation for alleged export violations.
While current sales are strong, the ongoing U.S. investigation could lead to negative outcomes affecting the stock price. The situation is uncertain, hence a neutral score.
CONFIDENCE 75
IMPORTANCE 85
RELEVANCE 85
NEGATIVE IMPACT
KLA Corp's stock may be affected by the industry concerns raised by the U.S. criminal investigation into Applied Materials for alleged export violations to China.
The investigation into Applied Materials could have a spillover effect on KLA Corp's stock due to industry-wide concerns, potentially leading to a short-term negative impact.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 70