Applied Materials: Weak Earnings Means ASML Takes Over The #1 Equipment Spot Again In 2024
Applied Materials' fiscal Q4 2024 semiconductor systems revenue grew 5% YoY and QoQ.
ASML is expected to overtake Applied Materials as the top wafer front end (WFE) semiconductor equipment supplier in 2024.
Chinese and foreign semiconductor equipment companies have taken advantage of loopholes in US sanctions, raising concerns about the effectiveness of new restrictions.
Analysis of Applied Materials’ Recent Earnings Call
As reported in Applied Materials’ (NASDAQ:AMAT) fiscal Q4 2024 earnings call of November 14, 2024, Semiconductor Systems sales were $5.18 billion for Q4, up 6% YoY and up 5% QoQ, driven by leading-edge foundry-logic demand. Non-GAAP operating margin was 35.4%, down 50 basis points year-over-year given the normalizing China mix.
Competitive Analysis with Peers
I wrote a December 5, 2024, article entitled “Applied Materials: Weak Earnings Means ASML Takes Over The #1 Equipment Spot In 2023.” I maintained then that ASML (ASML) would overtake Applied Materials as the top WFE (wafer front end) Semiconductor Equipment supplier in 2023, according to my analysis. I now contend that ASML will maintain its #1 position in 2024, which I detail in my report Global Semiconductor Equipment: Markets, Market Shares and Market Forecasts, and details are available on my website at The Information Network.
Chart 1 shows that for three quarters 2024 and full year 2023 and 2022, equipment only, revenues (not including service or spare parts) for ASML are up 6.6% over AMAT.
Chart 1